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US economic uncertainty stokes collateral fears

Near-default of US government adds to industry anxiety on collateral

The US debt debacle last week could spur firms to move away from using US Treasury bills as a way to guarantee trades at clearing houses, exacerbating fears of a collateral crunch in early 2014.

A failure of the US government to meet its debt obligations by October 17 would have diminished the value of short-term US Treasury bills, assets that are commonly used by investors as collateral to guarantee trades at clearing houses.

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