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How would corporate bonds, emerging market debt and other securities be priced if there were no longer "risk-free" rate to benchmark against? Would the dollar lose its status as the world's reserve currency?
Opinions were mixed, but for the most part our correspondents' answers painted a picture of a flexible Wall Street finding a way to cope. A post-AAA world would be different, but it would carry on.
--Gary Jenkins, head of fixed income research at Evolution Securities in London: "A one-notch downgrade by one agency would generate huge headlines, the world would end for about half an hour, then we'd all go back to work. The U.S. is regarded as the safe haven, but the market gets used to these moves very quickly and takes them in its stride."
The U.S. is regarded as the safe haven, but the market gets used to these moves very quickly and takes them in its stride."