NEW YORK, May 12 (Reuters) – Bond trading platform Tradeweb is in talks with clients, industry groups and other market participants about contingency plans in the event of a US debt default, a spokesman said on Friday.
Financial markets are concerned about the possibility of the US Treasury defaulting on its debt as President Joe Biden and top lawmakers have remained deadlocked in talks over a $31.4 trillion increase in the federal borrowing limit.
Since U.S. Treasuries are considered building blocks of the global financial system, a possible default would cause a stir in the financial markets.
In response to a Reuters query, Tradeweb said it is “further developing its contingency plans” to ensure its clients can execute trades efficiently on any potential outcome.
The company operates electronic marketplaces for interest rates, loans, stocks and money markets. A total trading volume of $22.3 trillion was reported last month.
“As the leading electronic trading platform for U.S. Treasuries, we are prepared for any necessary technical changes to the affected securities,” a Tradeweb spokesman said in a statement to Reuters.
For the past decade, disputes over the debt ceiling have mostly been resolved before they could impact markets, but a relatively short time frame and the narrow Republican Party majority in Congress may make it harder to reach a compromise this time.
The US Congressional Budget Office said in a report released Friday morning that there was a “significant risk” of a historic default in the first two weeks of June.
Reporting by Davide Barbuscia; Edited by Jonathan Oatis
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