Bernanke: Europe Threatens U.S.

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.