Yellen warns of financial system risk if debt ceiling is not raised
(Bloomberg) – Treasury Secretary Janet Yellen told US financial regulators on Thursday that if Congress fails to resolve the country’s debt ceiling, there could be “implications for financial stability.”
The consequences of not increasing the limit “in a timely manner” were among the topics discussed at a private meeting of the Financial Stability Supervisory Board, the Treasury Department said in a statement. Yellen campaigned for congressional action and warned the Treasury would likely hit the borrowing limit next month.
The board of regulators, comprising the heads of the Federal Reserve, the Securities and Exchange Commission and the Office of the Comptroller of the Currency, is charged with avoiding risks that could trigger another financial crisis. The group also discussed the commercial real estate market and heard a presentation from the Federal Reserve Bank of New York on industry trends and “the exposures of various financial sectors to commercial real estate and potential risks.”
Under the orders of President Joe Biden, the council is also working on a report assessing how climate change could undermine the financial system, which is expected in November.
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