The Organisation for Economic Co-operation and Development (OECD) has issued a stark warning regarding the potential ramifications of a failure to raise the U.S. debt ceiling. The international body emphasized the critical need for U.S. policymakers to reach a consensus and avert a default on the nation’s obligations.

According to the OECD, a failure to raise the debt ceiling could trigger:

• Significant financial market volatility
• A sharp increase in borrowing costs
• A contraction in economic activity

The OECD’s concerns echo those of other international organizations and economists, who have repeatedly stressed the importance of maintaining the stability of the U.S. financial system. The U.S. dollar’s role as the world’s reserve currency means that any disruption to the U.S. economy could have far-reaching consequences.

The OECD urged U.S. lawmakers to consider the global implications of their decisions and to act responsibly to ensure the continued stability of the international financial system.