The US Treasury Department has said it expects to max out its borrowing authority next week and won't be able to prioritise payments on US debt over obligations like Social Security.
Lawmakers have seemed at an impasse over raising the debt limit. Democrats want to re-open federal agencies, which have been partially closed since funding ran out on October 1, and Republicans insist any debt ceiling deal includes plans to cut government spending.
Dimon and other top executives from major US financial firms met with President Barack Obama and with lawmakers last week to urge them to deal with both issues.
On Saturday, Dimon said banks are already spending "huge amounts" of money preparing for the possibility of a default, which he said would threaten the global recovery after the 2007-2009 financial crisis.
"We need global growth," he said. "We are on the verge of getting it. Please let's not shoot ourselves in the foot."
World Bank chief Jim Yong Kim urged policymakers to avert the crisis, warning that "we are now five days away from a very dangerous moment."
"If this comes to pass, it could be a disastrous event for the developing world, and that in turn will greatly hurt the developed economies as well," Kim said at the close of World Bank-International Monetary Fund meetings in Washington.Read more: http://www.smh.com.au/business/us-debt-ceiling-worlds-top-bankers-say-default-would-be-catastrophic-20131013-2vfzp.html#ixzz2haCisGWn