Up and down Wall Street , teams are huddling inside banks and gauging the risks to themselves, their clients and markets if US lawmakers fail to raise the debt ceiling. Efforts to brace balance sheets and advise clients on contingency planning are prompting a surge of costly hedges. "We want to make sure market participants have a collective sense of how the system, the pipes that make things function, will work in the event of a breaching of the debt ceiling," said Rob Toomeyof the Securities Industry & Financial Markets Association, a major trade group. Bank executives' advice to Washington - to reach a deal quickly - contrasts with the pace of talks there, where the deadline cited most often is the so-called X-day, when the government is expected exhaust options for funding itself. That's projected to happen in just a few weeks.

Source: Economic Times May 17, 2023 16:00 UTC