Global financial leaders cast wary eye on U.S. default

The World Bank and International Monetary Fund are currently holding their annual meetings in Washington, D.C., where talk has turned to the political impasse that has partially closed the U.S. government and is threatening a default on the nation’s debt.

When it comes to the shutdown, most global financial leaders are reacting with shrugs, according to Bloomberg Businessweek’s Charles Kenny. The shutdown, as they see it, has hurt the U.S. economic recovery but hasn’t had much impact on the rest of the world.

However, World Bank and IMF leaders are much more concerned by the possibility of the U.S. defaulting on its debt payments. They warn that because the global financial system depends on the stability of U.S. Treasury bonds, a default could lead to the collapse of banks worldwide that rely on debt repayment to continue their own borrowing and investing.

Read more at Bloomberg Businessweek.