Rajesh Narayanan, Charles Clifford Cameron Professor in Finance, was quoted in the recent Times-Picayune article “Debt-ceiling default would affect Louisiana’s public health care.” The article explores the effects if a deal is not reached by the August 2 deadline.
“We think of the federal government debt as being as close to being risk-free as possible,” Narayanan is quoted as saying. “So the market tacks on a risk premium for other (private) debt. If the cost of risk-free debt rises, then everything else sees an uptick as well.”
The article ran July 29, 2011, and can be viewed online here.
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