Banks Finding Few Signs of Distress in Repo, Credit Markets

U.S. banks searching for hints of credit-market distress ahead of next week’s deadline to raise the debt ceiling are finding few signs of panic so far.

Commercial banks and securities firms are tracking how money-market funds adjust holdings and whether participants in repo markets, where financial firms obtain short-term financing, change terms for collateral including Treasuries, according to executives in charge of finance operations at five of the largest U.S. banks. They are also looking for disruptions in commercial paper and swaps markets, said one of the people, who declined to be identified because the deliberations are private.