US banks fearing default stock up on cash

US banks were stocking cash machines with extra funds, investors dumping Treasury bills and US equity indices sinking on Thursday in a sign of mounting unease that Washington risks defaulting on its debt later this month.

... Meanwhile, two of the country’s 10 biggest banks said they were putting into place a “playbook” used in August 2011 when the government last came close to breaching the debt ceiling.

One senior executive said his bank was delivering 20-30 per cent more cash than usual in case panicked customers tried to withdraw funds en masse.

The move to source extra cash is a precaution to deal with an unnecessary upturn in demand, banks said. The Federal Deposit Insurance Corporation insures deposits up to $250,000.

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