The United States Senate is reportedly close to a deal to restart the US Government, and raise the US debt ceiling and avoid defaulting on America’s obligations.  Just in case, Central Banks around the globe are making contingency plans in case a small group of conservative extremists force the US off “the fiscal cliff”.

Policy makers discussed possible responses when they met at the International Monetary Fund’s annual meetings in Washington over the weekend.  Observers believe the world’s central banks would likely echo their actions after the collapse of Lehman Brothers in 2008, and ensure a supply of currency.  Central bankers achieved this with pledging ample liquidity; easing the collateral they lent against; and boosting dollar swap lines with each other to ensure supply of the currency.

But failing to make debt payments would be much worse than the collapse of Lehman.  The US has $12 Trillion of outstanding debt – that’s 23 times the $517 billion Lehman owed when it filed for bankruptcy in 2008.

That’s way to big for any government to trowel over with readily available cash.

“It will be like putting band-aids on a gaping wound,” said Deutsche Bank AG co-Chief Executive Officer Anshu Jain.