Europe ‘the most serious risk’ to American jobs, Treasury official says

{mosads}While the U.S. financial system only has “moderate” exposure to Europe’s most struggling nations, the Treasury is worried about the impact on trade, as well as the extensive ties some U.S. banks have to their European counterparts.

“The interconnectedness of financial institutions with sovereigns makes it difficult to quantify precisely all possible exposures, which in turn increases the risk that a credit event could lead to generalized declines in investor sentiment, losses of liquidity and associated disruptions of international financial markets,” Collyns warned.

European leaders have been engaged for weeks in high-stakes negotiations as members of the European Union try to hammer out a deal to support struggling members including Greece.

While Collyns said Europe clearly has the ability to deal with the problem, it is a matter of developing the political will to do so.

To help in that effort, he said President Obama has “continued to press” foreign leaders, and Treasury Secretary Timothy Geithner “remains closely engaged” with the situation.