Fed Chairman Ben Bernanke is testifying before the Committee on Government Oversight and Reform at the U.S. House of Representatives in Washington, D.C. today.  His FRB notes titled this one “The European Economic and Financial Situation.”  Here are some highlights from Bernanke’s testimony:

Developments in Europe have had an important influence on the tenor of global financial markets and on the global economy more generally.

The difficulties in the euro area have affected the U.S. economy (roughly one-fifth of U.S. exports of goods and services).

Financial strains in Europe have also shown through to our financial markets… BUT… In the past few months, financial stresses in Europe have lessened, which has contributed to an improved tone of financial markets around the world, including in the United States.

Second, euro-area leaders, the Greek government, and private-sector holders of Greek debt are taking steps to put Greece on a more sustainable fiscal path. (not a ‘wink-wink in the notes)

Third.. leaders of most of the members of the European Union have approved a new fiscal compact treaty that strengthens fiscal rules and their enforcement.

Bernanke noted that the Federal Reserve acted in concert with major foreign central banks to enhance the U.S. dollar swap facilities that were originally put in place during the global financial crisis and reestablished in May 2010.

FULL BERNANKE TESTIMONY COMMENTS

JON C. OGG

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