Global financial markets would be destabilised if Saudi Arabia decides to sell off the $750 billion worth of American assets it holds in protest against a controversial legislation that would allow 9/11 victims to sue the kingdom, the White House has warned. “What I’ll just say in general is our concern is that a hypothetical transaction or series of transactions like this would destabilise the global financial markets,” White House Spokesperson Josh Earnest said.
There’s growing support for a Senate bill to allow victims of the 9/11 terrorist attacks to litigate the Saudi government for recompense for any involvement it may have had in the event. Saudi Foreign Minister Adel al-Jubeir ad told the US that the country would be forced to sell up to $750 billion in Treasury securities and other US assets in response to the bill if it passed.
“President Barack Obama did not support the legislation and would not sign it. The bill would allow the Saudi government to be sued in a US court for any role in the September 11 attacks,” Mr Earnest said. “I am confident that the Saudis recognize, just as much as we do, our shared interest in preserving the stability of the global financial system,” he added. Mr Obama is scheduled to travel Saudi Arabia this week. Mr Obama has opposed the bill saying that it could expose the US to lawsuits from citizens of other countries.
“That kind of instability and that kind of volatility is not in the interest of any of the advanced economies around the world. Both the US and Saudi Arabia would be in the category of advanced economies that would not benefit from a situation like that,” Mr Earnest said. “Given our shared interest in protecting the stability of the global financial system, I suspect it’s not something that would be considered for long,” he added.
As a matter of fact, Saudi Arabia owns US Treasury debt as the market for such assets is very large and stable, because these holdings give international credit markets confidence in the country’s ability to pay off debt denominated in dollars.
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