RT: Key creditor China begins acting to hedge against US default
Posted by satyrikon στο Οκτωβρίου 10, 2013
Published time: October 10, 2013 12:15
Hong Kong has sent the first sign from Asia that the region is creating extra financial buffers against a possible default in the US. China said some US short – term Treasury bonds appear to be more risky to hold as collateral than previously thought.
The clock is ticking for the US to make a decision on its spending bill and the massive $16.7trln debt. The country’s key foreign lender China has shifted from words to actions and said it has taken two steps to reflect the increased difficulty of valuing certain short-term US Treasuries, the Financial Times reports.
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One of the steps includes a so-called “haircut”, or a discount, on the value of US Treasuries held as collateral against futures trades.
The interest rate for bonds held with…
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