Bernanke: Europe Threatens U.S.

    WASHINGTON, DC - NOVEMBER 02: Federal Reserve Chairman Ben Bernanke speaks during a press briefing at the Federal Reserve building, on November 2, 2011 in Washington, DC. Chairman Bernanke has again said that the Fed's decision making body, the Federal Reserve Open Market Committee, has decided not to raise interest rates at this time.  (Photo by Mark Wilson/Getty Images)

    Mark Wilson / Getty Images

    Federal Reserve secretary Ben Bernanke, under pressure for doing little to ease American unemployment, said Thursday that the European debt crisis “poses significant risks to the U.S. financial system.” He warned policymakers against “fiscal tightening” that is built into many budgets and, in Bernanke’s view, would hinder an economic recovery. Bernanke did not mention any specific actions the Fed is planning to take. Underscoring Bernanke’s warning, the ratings agency Fitch downgraded Spain’s credit rating to triple B, intensifying calls for a European action to bail out the country’s struggling banks.

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