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Banks Prep for Government Default – Stock Piling Cash for Customer Panic Runs

posted Oct 6, 2013, 1:56 PM by Prep Experts
October 5th, 2013 

America’s biggest banks are stockpiling extra cash in their ATMs, amid fears that the government shutdown and the threat of a US default will induce a sudden panic among their customers.

Major banks have increased the amount of funds by around a third, and are holding daily meetings in sealed rooms to map out their contingency plans, according to well-placed sources.

In some cases, they are discussing the possibility of extending free credit to customers who do not receive the Social Security payments they would normally rely on, because of the ongoing services blackout.

First a default, then a depression? Some think so

Damage from a U.S. credit default would be more than bad public relations—it could affect everyone from bankers to pensioners to holders of supposedly sacrosanct money market funds.

In a research note analyzing the various consequences of a debt default, banking analyst Dick Bove pointed to a variety of areas...