Bernanke Warns Of New Crisis

The Chicago Tribune reports:

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke warned on Tuesday that a failure to lift the government's $14.3 trillion debt ceiling risks a potentially disastrous loss of confidence in America's creditworthiness.

In comments that could give fresh impetus to talks on raising the legal limit on the nation's debt, Bernanke said the United States could lose its prized AAA credit rating and the U.S. dollar's special status as a reserve currency might be damaged if Congress fails to act soon.

"Even a short suspension of payments on principal or interest on the Treasury's debt obligations could cause severe disruptions in financial markets and the payments system," he told a budget conference.