Ratings agency Fitch has called the US debt ceiling a 'potentially dangerous mechanism' for enforcing fiscal discipline. Tony Stringer, Managing Director of Sovereign Analysis, says failure to raise it could see the US default on some of its obligations which would probably see Fitch cut its AAA rating.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (JANUARY 15, 2012)

1. FITCH MANAGING DIRECTOR OF SOVEREIGN ANALYSIS, TONY STRINGER, SAYING:

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(QUESTION: Tony, if the debt ceiling is not raised, what kind of probability are we putting on the US's AAA rating being cut? 60%, 70%, 80%?)
Well first of all we do expect the debt ceiling to be raised. We're anticipating another last minute deal which probably won't address all the difficult decisions on tax and spending. If for any reason they won't come to any agreement, then we've made it clear we think that the US Treasury will effectively run out of cash towards the end of February, beginning of March. They're at the moment going through using these extraordinary measures. About $200 billion has given them a bit of leeway through the first couple of months of this year. But clearly they could then be into a very difficult position of having to prioritize between debt obligation repayments and other costs.
(QUESTION: You also say in your report today that the US faces a downgrade later in the year even if the debt c risis, debt ceiling crisis is averted.)
Well we're saying that still will be a possibility because one of the key aspects of any agreement on the debt ceiling would be some kind of more far-reaching agreement between- amongst Congress to address the longer term sort of fiscal challenge that the US faces and place US finances on a sustainable medium term path. It's the kind of issue that has been recurring since the last debt ceiling crisis in August 2011, something they haven't addressed up to now. And we're hoping that they are able to do so at this juncture.'