Executives from the biggest Wall Street banks have been called to the New York Fed to talk with Treasury Department officials about what will happen if the debt ceiling isn’t raised by August 2nd, the AP reported.Banks have been desperate for any information from the Treasury and the Fed about contingency plans if the U.S defaults or has its debt downgraded from AAA, but neither institution has been willing to engage with Wall Street firms.
“The Treasury late Thursday invited 20 of the largest banks to a meeting to discuss an upcoming quarterly auction of government debt,” the AP reported. The meeting will happen at midday.
Representatives from the bond-trading groups at JP Morgan, Citi, Goldman, and Barclays will be there.
“Treasury officials refused to provide specifics on what they planned to tell the major financial institutions on Friday but they indicated that the discussions would allow officials to hear concerns voiced by the biggest participants in the bond market.”
Morgan Stanley’s David Greenlaw said, via Zerohedge: “The NY Fed just asked primary dealers to come downtown today at noon to meet with Fed and Treasury Dept officials. We expect to hear them outline a contingency plan for next week. Details to follow.”
Bankers have been looking for specific answer on want the Fed plans to do after August 2nd if an agreement isn’t reached.