Global banks plea for US debt deal
Friday July 29 2011 | 05:16 AM

The world's largest financial services firms have written to US President Barack Obama and members of congress pleading for an end to the debt ceiling impasse. 

An impassioned letter from the Financial Services Forum tells the leaders that failure to reach agreement would be "very grave" for the economy, the struggling job market, for US citizens and also for the country's "global leadership". 

It adds that a downgrade to the US credit rating would be a "tremendous blow" to business and investor confidence, with the resulting interest rate increases and undermining of the dollar currency "dramatically worsening our nation's already difficult economic circumstances".

"Given this very real risk, policymakers must correct our fiscal course now, inspire market confidence by paying all of our bills on time, and demonstrate that America is a democracy capable of putting differences aside to solve our most challenging problems," says the letter released on Thursday. 

The letter's 14 signatories include Goldman Sachs chief executive officer Lloyd Blankfein, JPMorgan Chase & Co chief executive officer Jamie Dimon and Allstate Insurance Company president Thomas Wilson.

"A credible and predictable path forward, entailing tough decisions on the budget, will create the needed environment for businesses and entrepreneurs to start, grow, innovate, and create high quality jobs for Americans, now and in generations to come," it continues. 

"We strongly urge you to reach an agreement this week."

The letter follows an earlier dispatch from the forum, sent on 12 July and backed by over 470 businesses, calling for an agreement over the debt argument to be reached. 

The country faces its first ever default unless leaders can agree on a deal to raise the $14.3tn debt ceiling.