Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Top U.S. bankers warn against prioritizing interest payments: WSJ

10/08/2013 | 04:59am US/Eastern

(Reuters) - Top U.S. bankers have warned the Obama administration and Republican lawmakers that any move to pay interest on debt before obligations such as Social Security and payments to veterans would pose severe risks to financial markets and the economy, the Wall Street Journal reported.

Some lawmakers think prioritizing interest payments would placate bond investors if the government breaches its borrowing limit, the Journal said.

However, heads of the nation's largest financial institutions told the officials in meetings that prioritizing some payments would create insurmountable uncertainty for investors, drive up borrowing costs and disrupt markets, the Journal said, citing people familiar with the meetings.

As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked Congress also faced an October 17 deadline to increase the nation's borrowing power or risk defaulting on its debt.

If no deal is reached, many outside observers including debt-ratings firms assume the government will begin prioritizing payments to bondholders over others, rather than risk defaulting on its debt, the Journal said.

(Reporting by Sakthi Prasad in Bangalore; Editing by Supriya Kurane)

React to this article
Latest news
Date Title
04:47p GUSCIO : The Investors Show QEII Centre
04:46p FORD MOTOR : 1.9L Ford Escort Used Engines Now Part of CHV Inventory at PowertrainGuys.com Website
04:42p Celladon Reports Negative Results for CUPID2 Trial of MYDICAR(R) in Advanced Heart Failure
04:31p GENERAL MOTORS : Chevy L29 Vortec 454 Engines in Used Condition Receive Two-Year Warranty Plans at Auto Company Website
04:28p IAMGOLD : Fatality resulting from vehicle accident in Mali
04:27p EZDAN : Profits up 13.4% in First Quarter of 2015
04:20pDJSUBSCRIBERS : New Zealand Market Items Not Available Due to Holiday
04:16p FORD MOTOR : Thunderbird 3.9L Used Car Engines Added to V8 Sale Priced Inventory at Powertrain Portal Online
04:09p Don't turn it into another Kalabagh
03:59p RUPERT MURDOCH : Rupert Murdoch says Scottish self rule inevitable 'in next few years'
Latest news
Advertisement
Hot News 
GCP STUDENT LIVING : Dividend Declaration and Net Asset Valuation
AERIE PHARMACEUTICALS : Pharma plunges aftermarket as Rhopressa study fails
SYQIC : Gets Working Capital Facility Offer, Improves Cash Position
INNATE PHARMA : and AstraZeneca announce global agreement for IPH2201 in immuno-oncology
French Connection warns on full-year results
Most Read News
04/25 DEUTSCHE BANK : to keep 500 German retail branches - Welt am Sonntag
04/25 MANCHESTER UNITED : United aiming to win title next year
03:53a ASIANA AIRLINES : plane moved nearly 2 weeks after botched landing
04/25 KROGER : accounting celebrates 20 years of growth in Hutchinson
03:16p Government says will oppose any takeover of BP - FT
Most recommended articles
04:20pDJSUBSCRIBERS : New Zealand Market Items Not Available Due to Holiday
03:59p RUPERT MURDOCH : Rupert Murdoch says Scottish self rule inevitable 'in next few years'
03:16p Government says will oppose any takeover of BP - FT
03:02p EU Commission to revise down Greek growth forecast - paper
02:45p Sika's family owner seeks to overturn AGM decisions about takeover
Dynamic quotes  
ON
| OFF