Major US Banks Set Up Elaborate War Rooms Last Month In Case The Government Defaulted

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http://www.businessinsider.com/major-us-banks-set-up-war-rooms-for-default-2013-11

NEW YORK (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.

It may not go to waste. The temporary budget agreement that President Barack Obama signed shortly after midnight on October 17 to end the shutdown and lift the default threat, authorizes government spending through January 15 and eases enforcement of the debt limit until February 7, creating the potential for another budget crisis early next year, even as some Republicans vow they will avoid it.



Read more: http://www.businessinsider.com/major-us-banks-set-up-war-rooms-for-default-2013-11#ixzz2l5jalJKn

[LuvNewcastle]

1. Well isn't that cozy?

the government bails out the banks and then the banks bail out the government. We're going to get to the point where we won't know the difference between Goldman Sachs and J.P. Morgan and the federal government. I guess they're not satisfied with behind-the scenes control of the government, they're going to make it actual and total. And what do we have when we have corporations as our government, folks?

[Alkene]

2. You mean we don't already? n/t

[LuvNewcastle]

3. We've always had at least a veneer of democracy before now.

I don't even think that is going to last much longer.

[progressoid]

4. Yeah, I did that too.

I looked under the seat of my car and in the sofa. I got 47 cents.