While the latest debt stalemate could soon be resolved with a short-term fix, the threat of a default is liable to rear its head again before year's end.Government officials and market observers worry such uncertainty could have an enduring effect on financial markets.
Bankers have been assured by the Fed that the central bank would accept defaulted Treasury securities as collateral for emergency loans in the event of a liquidity crunch, but the Treasury Department of the Obama Administration has yet to commit.
Such mixed signals creates uncertainty and could provoke a panic that would make such a liquidity crunch more likely.
