U.S. Default Potentially Worse Than Lehman: Nichols

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Oct. 7 (Bloomberg) -- Rob Nichols, president and CEO of the Financial Services Forum, discusses the impasse over the U.S. debt ceiling with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

The biggest financial terms doing business in the u.s.. i began by asking him about the level of frustration ceos are feeling because of the deadlock in washington.

There is a lot of concern over this current impasse.

Obviously, our message to policymakers on both sides is to work together.

Defaulting on our debt is unthinkable.

It is unfathomable.

There is a lot of concern on the part of the markets.

This is not just on the need to everett this crisis here.

But also we have a strong desire for both parties to work together to put our nation on a long-term fiscally sustainable path.

That is entitlement reform.

This is roughly 75% of our long- term debt.

Then we are also in the middle of a government shutdown.

Let's talk about a grand bargain.

President obama and speaker banner almost have mom.

Is it time to revive that.

This is so partisan the only baby steps can be achieved?

I hope we could arrive back at a larger deal that puts our nation on a fiscally sustainable path.

We need to bend the cost curve.

We all need to do that.

If we are able to put together a longer deal that in versus a smaller deal, i think that would probably be very welcomed.

I think the markets would view that very positively and very favorably.

We also want to restore our global leadership.

There are questions about our nation's ability to get this done.

The ability of our nation to govern itself in a thoughtful way.

If we err -- were able to put something broader together that reforms taxes and makes it more competitive intensity debt ceiling, i think the markets would cheer that.

The white house and congress no doubt hear your concerns.

There is a difference between hearing and listening.

How much clout do the ceos half of affecting change?

We met with leaders of both parties.

Our message in our meetings was on the need to avert any sort of debt default.

That was the bulk of the conversation that if we were going to default on its debt the negative consequences associated with that would be quite severe and quite unfortunate.

In terms of the debate underway, we have had several days between now and october 17. we are continuing to urge both parties to work together to arrive at a solution so that we do not bring additional economic harm onto our economy and the american people.

The government shutdown is being felt around the country.

The default on america's debt would be felt around the world.

Describe for us the global ripple effect if the nation's debt ceiling is not raise?

As unfortunate as the shutdown is, it would pale in comparison to a debt default.

We think it would be a severe trauma globally.

Obviously, you would have skyrocketing interest rates that would dampen economic growth here.

It will make it harder to pay down our debt.

The interest on the debt will increase.

As you know, the real scary potential is the fact that u.s. treasuries are the foundation of the global financial system.

The whole thing would unravel.

I think the consequences are unthinkable and just unfathomable.

With it be worse than lehman?

A lot of people have been saying that.

I think it certainly has the potential for that to be worse.

I think that is right.

At the same time we are trying to be very careful.

We're not trying to spook or rattled the markets.

The leaders of the financial services form do feel that deeply.

We do need to talk about the potential negative economic consequences of default so there

This text has been automatically generated. It may not be 100% accurate.

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