Banking executives urge Obama, Congress to reach deal on debt ceiling
Chief executives from the nation's largest banks sent President Obama and Congress a letter urging them to reach an agreement on the debt ceiling. The CEOs said any decision that leads to the country defaulting on its debt will have grave consequences for the financial markets and the nation. Dozens of chief executive officers signed the letter, including Brian Moynihan of Bank of America (BAC), Vikram Pandit of Citigroup (C), Robert Kelly of BNY Mellon (BK), Lloyd Blankfein of Goldman Sachs (GS), Steven Kandarian of MetLife (MET), James Gorman of Morgan Stanley (MS), Richard Davis of US Bancorp and John Stumpf of Wells Fargo & Co. (WFC) "Our economic recovery remains very fragile," the executives wrote. "A default on our nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence — raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets — and, therefore, dramatically worsening our nation’s already difficult economic circumstances." Bankrate.com noted in a report Thursday that some mortgage rates edged up on concerns a default would send mortgage rates soaring. Christopher Whalen, co-founder of Institutional Risk Analytics, issued a contrarian opinion on the debt ceiling issue Wednesday, saying it may be painful, but is needed to turn America away from the "borrow and spend policies advocated by second generation New Dealers," which resulted in ongoing inflation. David Stevens, president and CEO of the Mortgage Bankers Association, said he is "is very concerned about the implications to the financial system of the United States if the U.S. defaults on its debt. "The likely impact to the financial markets, interest rates, and to every family in America will be costly if the ceiling is not raised," he said. Write to Kerri Panchuk.