Powerful Bankers Warn U.S. Default Would Be "Catastrophic"

Your News Companion by Ben Mathis-Lilley
Oct. 13 2013 10:32 AM

JPMorgan CEO: Default “Would Ripple Through the Global Economy In a Way You Couldn’t Possibly Understand”

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James Dimon, Chairman and CEO of JP Morgan Chase, attends a panel on finance at the Clinton Global Initiative (CGI) on September, 2009

Photo by Mario Tama/Getty Images

Some of the most powerful bankers in the world are speaking up, warning that if Washington doesn’t get its act together, the whole world is going to suffer. “The United States cannot default and, in my opinion, will not default,” JPMorgan CEO Jamie Dimon said, according to Bloomberg. “It would ripple through the global economy in a way you couldn’t possibly understand.” For his part, Deutsche Bank leader Anshu Jain said a U.S. default would be “utterly catastrophic.”

Speaking at a financial conference in New York, Dimon said that a default “ would be a very rapidly spreading, fatal disease.” Baudouin Prot, chairman of BNP Paribas agreed with his colleagues, saying that a U.S. default “would be absolutely disastrous, considering the role of the U.S. dollar.”

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Meanwhile, World Bank President Jim Yong Kim also issued a call for lawmakers to raise the debt ceiling saying that failing to do so “could be a disastrous event for the developing world, and that will in turn greatly hurt developed economies as well,” according to Reuters.

Daniel Politi has been contributing to Slate since 2004 and wrote the "Today's Papers" column from 2006 to 2009. You can follow him on Twitter @dpoliti.