How Wall Street is getting ready for a potential default on US debt


Wall Street banks and financial firms have been preparing for a potential US debt default by reexamining investment strategies, increasing liquidity, and hedging against risk. Many banks have been increasing their credit reserves, and some have been reducing their investments in government securities. Banks have also increased their levels of liquidity, in case they need to quickly raise money to meet unexpected needs.

Some banks have been restructuring their portfolios to invest in different markets, while others have been purchasing derivatives to hedge against the risks associated with a potential debt default. Additionally, some firms have been cutting back on lending, in order to reduce the potential losses should a US debt default occur.