Across Wall Street, bankers and traders -- including company executives -- are aggravated that the Fed "is refusing to engage in scenario planning for a US downgrade or default," the FT reports.
According to the FT, Wall Street is desperate for answers to questions including:
Will the Fed "lend against Treasuries with a defaulted interest payment?"
Will the Fed "support the refinancing of Treasury securities by stepping in and buying any unsold stock at auctions?"
Bankers want the Fed to provide its thinking on contingency plans for several possible outcomes of a downgrade or default. The potential fallout about which the banks are most concerned involves a possible "run on money market funds that hold Treasury bonds, the impact on capital and liquidity ratios if there are large inflows or outflows of deposits and the potential effect on short-term financing from any problems in the repurchase, or “repo”, market...."
Don't stop reading now. Go to http://www.businessinsider.com/wall-street-is-begging-for-answers-from-the-fed-about-planning-for-a-default-fallout-2011-7
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