Business

Goldman Sachs' Blankfein warns on debt ceiling impasse

Brian Moynihan and Lloyd Blankfein
Image caption Goldman Sachs' Blankfein and Bank of America's Moynihan warned of the economic consequences of the shutdown

Goldman Sachs' boss Lloyd Blankfein has warned that a failure to raise the nation's borrowing limit would be "extremely adverse".

The warning came after a meeting between US President Barack Obama and 15 heads of large companies on Wednesday.

Business leaders want Washington to understand "the long-term consequences of a shutdown," said Mr Blankfein.

The US government has been shut down since Tuesday, 1 October.

Other well-known business leaders who attended the meeting included Michael Corbat of Citigroup, Jamie Dimon of JPMorgan Chase, and Brian Moynihan of Bank of America.

By some estimates, the government shutdown is costing the US economy $300m (£185m) per day. If it continues, it could shave as much as 0.9% off third-quarter GDP growth.

Mr Blankfein and his banking counterparts have expressed concern that there is a possibility the impasse over the US budget could bleed into efforts to raise the so-called debt ceiling, which allows the US government to borrow money to pay back its debts.

The current debt ceiling of $16.7 trillion has already been breached in 2013, and the US Treasury has been engaging in a series of "extraordinary measures" since the summer to continue paying the nation's bills.

US Treasury Secretary Jack Lew has warned that those measures will be exhausted by 17 October, and then the nation would be forced to default on its debts.

Mr Obama is scheduled to meet Congressional leaders later on Wednesday.