SEC chair warns U.S. debt default would shock markets
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Securities and Exchange Commission Chair Gary Gensler warned Congress Tuesday that a U.S. debt ceiling breach threatened to unleash significant volatility and disruption in financial markets, as lawmakers remained at odds over how to avoid a government default.

Gensler — the top U.S. regulator overseeing Wall Street — said at a House Financial Services Committee hearing that the failure to raise Washington’s borrowing limit would create uncertainty for banks, mortgages, automobile loans and other financial instruments reliant on U.S. Treasury bills. The federal government borrows money to cover its operations and debts by issuing Treasury securities to investors.

“I think we’d be in very uncharted waters,” Gensler said, noting that Treasurys are the foundation of U.S. capital markets. “Though we don’t know for sure, we’d have significant volatility in the markets, and we’d see some breakages in the system.”



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