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Obama Keen on Raising Debt Ceiling, Warns of Financial Crisis

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hi, I'm Saijal Patel and you're watching "Asia Market Daily". A stern warning from the President of the United States...

Barack Obama says failing to raise America's debt ceiling will lead to a far worse financial crisis - than the one seen during the 2008 recession.

His comments come as house speaker John Boehner says he's ready to cut a deal, on raising the limit IF President Obama gets serious about spending cuts.

But Ethan Harris - of Bank of America Merrill Lynch Global Research - says neither men are going to win this fight.

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Ethan Harris, head of North America economics at BofA Merrill Lynch Global Research:
Well I think they're both going to lose here, because it's not the right thing to do in terms of fiscal policy. A major country like the U.S. shouldn't be playing games with the debt limit. Right now the gap between the two is very wide. My guess would be they'll strike some kind of deal at the last second, before we get a serious disruption in the capital markets. But the danger is that they decide to go over the cliff together in this game of chicken.

Harris warns there is no substitute for fiscal discipline - adding that Obama and Boehner need to come to an agreement FAST, before America misses paying its dues.

Ethan Harris, head of North America economics at BofA Merrill Lynch Global Research:
My guess is there's about a 30 percent chance that there'll be a technical default, in a sense that they'll delay some kind of interest payments here at the end of the Summer. An actual real default where there's ongoing lack of payments I think is extremely unlikely.

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Still on the topic of containing debt...

European Finance Ministers met in Brussels today - to discuss the worsening debt crisis in Portugal and Greece.

Overshadowing the meeting though, was news that IMF Chief Dominique Strauss-Kahn had been charged with sexual assault.

The IMF's Number 2 official, John Lipsky has stepped in as Acting Managing Director of the global institution.

But Lipsky has already said he plans to step down at the end of the term, which is in August - potentially leaving a leadership vacuum at the fund.

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Russell Jones Global, head of fixed income strategy at Westpac Institutional Bank:
I think it's just an element of uncertainty over the whole process and that's never good for financial markets. I think Strauss-Kahn as well has been very progressive figure at the IMF. He's really brought it into the modern day over recent periods. There may be some concerns out there. You've got a much more conservative leader were he to exit so to speak. But generally it's the uncertainty.

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That's the latest "Asia Market Daily". I'm Saijal Patel from CNBC, thanks for joining me.

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