© Lucas Jackson/REUTERS
Difficult days: a flag flies outside the New York Stock Exchange building in New York.
Difficult days: a flag flies outside the New York Stock Exchange building in New York.
Wall Street's stark message to President Barack Obama on Thursday was that failure to end the war between Democrats and Republicans over US debt would smash business confidence, cripple the economy and send financial markets plunging.
Chief executives of all the major banks wrote to the White House warning that a continued deadlock over raising the debt ceiling "would be very grave".
With the 2 August deadline rapidly approaching and a vote in the House of Representatives scheduled on Thursday night, the bankers said they wanted to see "meaningful and concrete steps to put our nation on a sound fiscal footing".
The warning from Wall Street came amid renewed concerns over the fate of the eurozone, with bond yields in Italy and Spain back to the levels seen before the debt package for struggling members of the single currency was agreed a week ago and Cyprus starting to look like the next country in need of a bailout.
Signed by Jamie Dimon of JP Morgan, Lloyd Blankfein of Goldman Sachs and Vikram Pandit of Citigroup, the letter said: "Our economic recovery remains very fragile. A default on our obligations, or a downgrade on America's credit rating, would be a tremendous blow to investor confidence - raising interest rates for everyone who borrows, undermining the value of the dollar and roiling stock and bond markets - and, therefore, dramatically worsening our nation's already difficult economic circumstances."
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