U.S. banks searching for hints of credit-market distress ahead of next week's deadline to raise the debt ceiling are finding few signs of panic so far.

Commercial banks and securities firms are tracking how money-market funds adjust holdings and whether participants in repo markets, where financial firms obtain short-term financing, change terms for collateral including Treasuries, according to executives in charge of finance operations at five of the largest U.S. banks. They are also looking for disruptions in commercial paper and swaps markets, said one of the people, who declined to be identified because the deliberations are private.

Lenders are making contingency plans in case President Barack Obama and Congress fail to reach agreement before an Aug. 2 deadline. Commercial banks are focused on a potential downgrade to the U.S. debt rating, with a default considered unlikely, said the executives. With less than a week to the deadline, key market indicators have remained stable.

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