JPMorgan Chase & Co has begun preparing for the possibility of the United States hitting its debt limit, Chief Executive Jamie Dimon told Reuters on Tuesday, adding he nevertheless expected policymakers to find a solution to avoid that "potentially catastrophic" event.

The country's largest lender has begun scenario-planning for how a potential U.S. credit default would affect the repo and money markets, client contracts, its capital ratios, and how rating agencies would react, Dimon said in an interview.

"This is like the third time we've had to do this, it is a potentially catastrophic event," he said.

"Every single time this comes up, it gets fixed, but we should never even get this close. I just think this whole thing is mistaken and one day we should just have a bipartisan bill and get rid of the debt ceiling. It's all politics," he added.

Congressional Democrats are scrambling to find a way to raise the government's $28.4-trillion borrowing cap before the Treasury Department runs out of means to service the nation's debt. Treasury Secretary Janet Yellen has said the Treasury will likely exhaust extraordinary measures by October 18.

Democrats have prepared votes to head off a government shutdown and a potentially economically crippling U.S. credit default on Tuesday, but a quick resolution appeared unlikely in the face of continued Republican resistance.

Fiscal brinkmanship has become a regular feature of U.S. politics over the past decade thanks to ongoing partisan polarization, with debt ceiling deals coming down to the wire in 2011 and 2017.

Bloomberg reported last week that Secretary Yellen had called the leaders of the biggest Wall Street financial firms to recruit them in her campaign to pressure Republicans to agree to a deal. The Treasury declined to comment on the report.

Dimon said as part of its preparation the bank was combing through its client contracts, a resource-intensive process.

"You've got to check the contracts to try to predict it out ... If I remember correctly, the last time we got prepared for this, it cost us $100 million," he said.

(With input from Reuters)