U.S. banks are set to reduce their usage of U.S. Treasuries in August as a contingency measure, Financial Times reports. The move is a precaution against any instability that may arise if Republicans and Democrats fail to increase the U.S. legal borrowing limit of $14.3 trillion.
Nearly $9.7 trillion of debt, sold by the U.S. government as part of their portfolios, is held by investors. Out of the total only $4 trillion is used to finance deals in the repurchase, futures and swaps markets.
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