NY Fed President Tells Congress Europe Doesn’t Need More Fed Help

New York Federal Reserve President, and vice-chair of the FOMC, William Dudley told a House subcommittee hearing today that the US has done as much as it needs to — for now — to help the Eurozone overcome its financial crisis. Dudley told the subcommittee members, “I do not anticipate further efforts by the Federal Reserve to address the potential spillover effects of Europe on the United States. … We will continue to monitor the situation closely.”

In December the Fed initiated a currency swap deal with the European Central bank that made US dollars available to Eurozone banks in exchange for euros. Critics of the swap program contend that it is a stealth bailout of Europe’s banks.

Dudley was upbeat, but cautious:

Severe stresses in European financial markets would disrupt financial markets here, which could harm the real economy. At a time when U.S. unemployment is very high, this is a particularly unacceptable outcome.

Dudley’s prepared remarks are available here.