03:41 - Source: CNN
Yellen: U.S. could default on its debt as soon as June 1 if Congress doesn't act
New York CNN  — 

During a meeting with more than two dozen bank CEOs on Thursday, Treasury Secretary Janet Yellen stressed the urgent need for Congress to address the debt ceiling, according to a readout of the meeting from the Treasury Department.

The meeting, which took place in Washington and included JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser, focused in part on the risks on the debt ceiling. Yellen also held a meeting Thursday with executives from mid-size banks, a person familiar with the matter told CNN, as the United States nears June 1, the date the nation could run out of cash to pay its bills unless lawmakers raise the debt ceiling.

In speaking with the larger bank CEOs, Yellen discussed the “urgent need for Congress to address the debt limit and underscored the real and severe consequences of default for the banking system and the domestic and global economy,” the readout said. Yellen described how a failure to raise or suspend the debt limit would be “catastrophic” for the financial system, families and businesses — a point echoed by Dimon and other executives themselves in public comments.

Beyond the debt ceiling, Yellen and the Wall Street CEOs discussed the ongoing banking crisis.

Yellen “reaffirmed the strength and soundness of the US banking system, noting that it remains well-capitalized with strong liquidity,” Treasury said.

In a nod to the industry’s efforts to resolve regional bank First Republic, which collapsed into receivership earlier this month and was acquired by JPMorgan Chase, Yellen “thanked many of the participants for their leadership and support in responding to these market developments,” according to the readout.

Yellen also met with mid-size bank CEOs

In addition to huddling with big bank CEOs, Yellen met in Washington on Thursday with executives from mid-size banks, a person familiar with the matter told CNN.

Both the debt ceiling and the banking stress came up during Yellen’s meeting with the Mid-Size Bank Coalition of America, an industry trade group, the source said.

The MBCA represents about 100 mid-size banks from across the country, including approximately eight lenders from California, where both First Republic and Silicon Valley Bank were based before their collapse.

During the meeting, which took place at the Treasury Department, mid-size bank CEOs expressed acute concern about how the debt ceiling standoff will impact their institutions, the source told CNN.

Yellen has met multiple times this week with the banking industry.