Executives from the country’s biggest banks met with U.S. Treasury officials Friday to discuss how debt auctions will be handled if Congress fails to raise the borrowing limit before Tuesday’s deadline.
Treasury officials met with representatives from 20 large banks that serve as primary dealers for the sale of Treasury securities. They took questions amid growing concern that the borrowing limit would not be raised in time to avoid a debt default. And they discussed the possibility of delaying or reducing the size of the upcoming auctions if the debt limit is not raised.
Some of the banks recommended that the government use short- term Treasury bills, called cash-management bills, in place of a full refunding auction. That would raise some debt but not as much as a refunding. So it could keep the Treasury under the current $14.3 trillion borrowing limit.
No decisions were announced at the meeting, and the Treasury provided no details on how the government will decide which bills to pay should the borrowing limit not be raised. A statement said the meeting was to prepare for an upcoming quarterly debt auction. The Associated Press
