USA: US TREASURY SECRETARY ROBERT RUBIN PRESS CONFERENCE

(25 Oct 1995) English/Nat

US Treasury Secretary Robert Rubin has warned that if Congress does not approve a higher debt limit, the country may default on its debt repayments next month.

In an interview with the Associated Press he charged the Republican-led Congress with trying to undermine the democratic process by refusing to compromise on its proposals to balance the budget.

Referring to the Daiwa Bank crisis, Rubin was confident that Japan was taking steps to prevent future incidents.

Last month Daiwa Bank revealed it lost one-point-one (b) billion dollars through a rogue trader over a period of 12 years.

U-S Treasury Secretary Robert Rubin prefaced his comments by saying that he thought it unlikely that Congress would allow the country to default.

But he painted a dire picture of the consequences should the present stalemate with the Clinton administration continue.

SOUNDBITE:

I think it would be read as a sign that our system isn't working right and I think that would be very unsettling in a broader sense. Unsettlement, if that's a word, and uncertainty tend not to be conducive to healthy markets.
SUPER CAPTION: Robert Rubin, U-S Treasury Secretary.

Falling behind on the debt would cause inflation at home as well.

SOUNDBITE:

That if in the first time in the history of the United States we defaulted on our full faith of credit, I think it would create a great question mark about our willingness to meet, our commitment to meeting obligations that I think would affect what money would cost twenty years from now for the federal government
SUPER CAPTION: Robert Rubin, U-S Treasury Secretary

And in a rare display of candour he accused Republicans of bypassing the democratic process.

SOUNDBITE:

The people who say, "No I don't want the process to work that way, but either you take our budget or you're going to default on the debt, " are basically trying to undermine the democratic process that work in this country and prevent people having a full debate on a set of issues that I think are critical to the future of this country.
SUPER CAPTION: Robert Rubin, U-S Treasury Secretary

The Secretary met leaders of both houses Tuesday in an effort to convince them of the urgent need to come to an agreement.

He also referred to the Daiwa Bank crisis, but thought it was an isolated incident.

Japan and the US, he said, agree on the need for secure banking regulation.

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