“Any default or delay would prove catastrophic for the global economy and for stock prices, particularly if US lenders sought to recoup their losses through higher borrowing costs,” he wrote.
JPMorgan Chase and Morgan Stanley , two of Wall Street’s biggest firms, are reportedly bracing for a possible US government default.
JPMorgan Chase CFO Marianne Lake said in an earnings call on Tuesday that the firm is “preparing for a potentially catastrophic default or delay” that will likely affect its business and “could significantly impact our cash flows and credit ratings” in the event of a default, CNBC reported.
Lake did not mention the debt ceiling specifically, but noted that their “business strategy is based on getting paid at the end of the day. And so, if we don’t get paid, we have to let people go, and we have a number of jobs that we have to let go.”
Morgan Stanley CFO Jonathan Pruzan on the same call said his firm is “conducting lots of modeling” on how a potential US default could affect its business.
“So we’re prepared. We understand the potential problems,” Pruzan said. “But we’re focused on our own business.”
JPMorgan Chase, JPMorgan & Chase, Morgan Stanley, Goldman Sachs, Bank of America and Citigroup were down more than 2 percent on Thursday.
House Minority Leader Nancy Pelosi (D-Calif.) said on Thursday that Republicans’ approach to the debt ceiling crisis was “hostage taking.”
Speaking at a press conference in Washington, Pelosi said she rejected House Speaker Paul Ryan’s (R-Wis.) “economic blackmail” proposal and accused President Trump of “holding the economy hostage.”
“Every day the United States of America lacks certainty or stability is a day further the economy stagnates,” Pelosi said.
Pelosi also accused Trump of looking to Trump to carry the blame for the “going-nowhere gridlock” in Congress because he “has a pathetic scorecard.”
She urged the GOP leadership to “stop grandstanding and start solving” the crisis, rather than accusing the Democrats of intransigence.