Insurer Allianz Group in Munich holds Treasurys in its portfolios to maturity, so a downgrade would have no effect on the company, spokesman Michael Matern said.
Another area of concern is what Wall Street calls “liquidity” — the ability to access cash quickly to pay lenders and suppliers. Many companies have assets they could sell to scare up money in a pinch. But any panic in markets after a U.S. default would make it difficult to find buyers just when they are needed most. Buyers fled after the collapse of Lehman Brothers five years ago, turning a bankruptcy into a financial crisis and plunging economies around the world into recession.
On Friday, JPMorgan CEO Jamie Dimon sought to reassure investors that his bank was prepared. He noted in a conference call with reporters that it had $250 billion on deposit at central banks around the world. “We have enormous liquidity,” Dimon said.
If other financial institutions are worried about liquidity or hits to their Treasury holdings, they’re not showing it.
A statement from Singapore’s DBS Bank, which has branches in many Southeast Asian countries, said it was not “unduly concerned” about a direct impact from a default. South Korea’s Woori Bank doesn’t believe South Korea would be hurt badly from a U.S. default. So it has made no contingency plans, said Jang Chung-sik, a spokesman.
The Philippine government thinks a default is unlikely but is moving to protect its economy anyway. At a news conference last week in the tiny nation of Brunei, the Philippine finance secretary said his country was taking steps to improve its “liquidity positions.” But his boss, the Philippine President Benigno Aquino III, said at the same news conference that no step would guarantee protection.
“When the world’s biggest economy turns belly-up, how can you actually protect yourself?” he said.