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Public Statements

Market Impact of Shutdown and Default

Floor Speech

Location: Washington, DC

Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, it is important to look at the impact of the shutdown and a looming government default on our financial markets.

On the shutdown, if the SEC uses all of its rainy-day money, it will be forced to close some key market oversight functions. There would be little to no oversight of exchanges. And if there were more trading glitches like the one that closed NASDAQ last month, the SEC wouldn't be able to respond quickly and problems could quickly spiral out of control. This could irreparably damage confidence in the safety and integrity of U.S. financial markets, and I've always said that markets run more on confidence than on capital.

On the debt ceiling, defaulting on Treasury bonds could be truly catastrophic. The assumption that Treasury bonds are risk free is the most fundamental assumption in the financial markets. It underpins the entire world's bond market. If Congress doesn't lift the debt ceiling and we default, Treasury bonds would, for the first time in our history, no longer be risk free. The value of bonds around the world would instantly fall, and billions of dollars of wealth would be destroyed in the blink of an eye. The dollar could even lose its status as the world's reserve currency.

We need to end the shutdown and lift the debt ceiling today. Jobs, growth, and the financial security of our country depend on it.

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