Bernanke briefs lawmakers on EU

Federal Reserve Chairman Ben Bernanke briefed senators Tuesday on efforts to stabilize Europe’s economy.

Financial markets have been on a rollercoaster for weeks because of worries the Greek debt crisis could spread to other European countries, and the Obama administration has been pushing Europe to provide significant support so Europe’s problems do not spread to the U.S.

Even though the U.S. is not offering any aid to Greece or the rest of Europe, the Federal Reserve has agreed to open swap lines to help alleviate pressure on the Euro, which has fallen amid fears Greece’s problems could extend to other European nations.

European countries and the International Monetary Fund are providing almost $1 trillion to any government in the European Union that finds itself in need. That seemed to calm markets on Monday, as stocks around the world – and the Euro’s value – soared.

Bernanke, according to a Senate Banking Committee spokesperson, promised senators
“transparency in swap operations,” and said he was “committed to make
contracts between Fed [and] other central banks public.” The Fed also told lawmakers it would report weekly on its swaps.

Republicans have criticized the U.S. role in facilitating the EU assistance package,
both through its monetary activities, and its actions indirectly in
supporting the International Monetary Fund (IMF), which has provided
billions to the EU rescue plan, on top of the money the IMF had
contributed to a bailout for Greece.