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
12:36a COLLAGEN SOLUTIONS : Jellagen Raises USD0.66 Million in Venture Financing
12:33a BEACH ENERGY : Monthly Drilling Report March 2015
12:33a GRAND CONCORD : Monthly Returns - Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 31 March 2015
12:32a STEEL AUTHORITY OF INDIA : PM Modi to inaugurate Rourkela Steel Plant's modernization project
12:28a SHANDONG MOLONG PETROLEUM MACHINERY : Clarification to annual results announcement for the year en...
12:28a EBAY : and Sotheby's Live Auctions Begin on April 1
12:27aDJNew Metric Aids Weak Credit Risks
12:26a BANK OF JAPAN : Yen Rises Amid Rising Risk Aversion
12:26aDJContrasting Fortunes of Samsung Executives Defy Profit Slump
12:25a EUR/GBP TECHNICAL ANALYSIS : Short Trade Hits First Target
Latest news
Advertisement
Hot News 
Office Markets in Tech-Heavy Cities Lead 2015 Pack
ARYZTA : BRIEF: Vinta, Oklahoma, bread factory ceases production
HSH.COM WEEKLY MORTGAGE RATES RADAR : Mortgage Rates Drift Lower This Week
ORBITE ALUMINAE : Announces Fourth Quarter and Annual 2014 Results
CYRUSONE : Upsizes and Prices Public Offering of Common Stock
Most Read News
03/31 Wall St. drops but S&P, Nasdaq register quarterly gains
03/31 DEUTSCHE LUFTHANSA : Nick Clegg: don’t let Andreas Lubitz distort views about mental illness
03/31 FOREMOST INCOME FUND : Reports 2014 Results
03/31 NEW FLYER : Winnipeg Bargaining Unit Collective Bargaining Agreement Extension
03/31 SHANTA GOLD : New Loan Facilities
Most recommended articles
12:27aDJNew Metric Aids Weak Credit Risks
12:26aDJContrasting Fortunes of Samsung Executives Defy Profit Slump
12:25a EUR/GBP TECHNICAL ANALYSIS : Short Trade Hits First Target
12:25a USD/CAD TECHNICAL ANALYSIS : Eyeing Familiar Range Top
12:21aDJMacerich Rejects Simon Property's Proposal to Acquire Company for $95.50 Per Share
Dynamic quotes  
ON
| OFF