Yellen warns US default could trigger recession, 'break' financial markets
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U.S. Treasury Secretary Janet Yellen holds a roundtable with finance ministers from borrower and shareholder countries to discuss "ways to maintain momentum to evolve the multilateral development banks to better meet current challenges" at the Internation
WASHINGTON (Reuters) - Treasury Secretary Janet Yellen on Tuesday warned that a U.S. default on government debt would leave millions of Americans without income payments, potentially triggering a recession that destroys many American jobs and businesses.
Yellen told a gathering of community bankers that the unprecedented economic and financial crisis would be exacerbated by possible disruptions to the federal government’s operations, including air traffic control, law enforcement, border security and national defense, and telecommunications systems.
She said the accompanying financial crisis could multiply the severity of the downturn, adding, "It is very conceivable that we'd see a number of financial markets break - with worldwide panic triggering margin calls, runs and fire sales."
(Reporting by Andrea Shalal)
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