Insight: As U.S. Default Threatened, Banks Took Extraordinary Steps -- David Henry and Lauren Tara LaCapra, Reuters
(Reuters) - As the United States threatened to default on its debt last month, major U.S. banks set up war rooms, spent many millions of dollars on contingency planning and, in some cases, even prepared to underwrite federal government benefits.
In a series of interviews with top bank executives, new details emerged about the extent of the contingency planning that was undertaken before and during the 16-day government shutdown and as a potential default loomed.
The planning for worst-case scenarios didn't come cheap. JPMorgan alone has spent more than $100 million on contingency planning for U.S. budget crises in recent years including this one, sources close to the bank say. It has reviewed and analyzed thousands of trading contracts, updated computer systems to handle fiscal emergencies, hired consultants, and built new models to figure out what might happen to securities prices.
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My Comment: This is very scary stuff because if things do unravel .... it will impact everyone.This is one of those situations where you do not need bombs and explosions to wreck people's lives and produce millions of victims .... destroying their money will accomplish the same thing.
In the meantime .... the US government continues to dig a deeper hole.
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