WASHINGTON The top executives from Goldman Sachs and Bank of America Corp. on Wednesday warned of "serious repercussions" if the U.S. government breaches the debt ceiling without a political solution.
Speaking at a brief press conference at the White House, Bank of America Corp. CEO Brian Moynihan said leaders of some the top U.S. financial institutions spent their meeting with President Barack Obama and Treasury Secretary Jacob Lew discussing the long-term ramifications of a government shutdown and the impact of a default, if the U.S.' debt ceiling is breached on Oct. 17.
"We spent most of the meeting talking about what we see in the economy and how we see it being affected by that and we see serious repercussions," said Moynihan.
His counterpart at Goldman Sachs, Lloyd Blankfein, said it's still unclear the depth of the damage that could be caused as a result of a U.S. default, but it would be "extremely adverse."
"We're here as representatives of the financial system," said Blankfein. "We are in a position to really know early what the consequences are none of us can be sure again, it's unprecedented, but this was a conversation that we listened but we also contributed to exactly how bad it would be."
The meeting at the White House comes on the second day of the government shutdown after Congress failed to broker a deal to avert having to shutter government offices and furloughed roughly 800,000 workers.
While the U.S. government has experienced previous shutdowns, it has never defaulted on its debt.
"There's precedent for a government shutdown," said Blankfein. "There's no precedent for default. We're the most important economy in the world. We're the reserve currency of the world. Payments have to go out to people. If money doesn't flow in, then money doesn't flow out. So we've really never seen this before and I'm not really anxious to be a part of the process that witnesses it."
Both chief executives made clear that the conversation with White House officials did not address what the solution would be, which is in the hands of Congress, but rather the implications of the current fiscal crisis facing the U.S. They also noted they have met with Republican leaders on the issue as well.
Michael Corbat of Citigroup Inc., Gerald Hassell of Bank of New York Mellon, James Gorman of Morgan Stanley, and John Strumpf of Wells Fargo & Co. were among the 14 top executives that met with Obama and Lew.
The Financial Services Forum, a trade group representing the CEOs of the 19 largest banking and insurance firms, led by Rob Nichols, set up the meeting.
On the way into the meeting, which lasted an hour and half, JPMorgan CEO Jamie Dimon told Bloomberg Television, "We're looking for a positive, constructive conversation."