Posted on 05/20/2010 11:17:14 AM PDT by NormsRevenge
WASHINGTON (Reuters) – Europe's debt crisis poses a "potentially serious" risk to the U.S. economic recovery because it threatens global credit markets and large American banks, a top Federal Reserve official said on Thursday.
Fed Governor Daniel Tarullo said Europe's debt woes, if not contained, could cause financial markets to freeze and spark a global crisis akin to the market meltdown of late 2008.
Until last week, Fed officials had been playing down the possible impact to the United States from Europe's turmoil.
"The European sovereign debt problems are a potentially serious setback," Tarullo said in testimony prepared for deliver to two congressional subcommittees.
Thursday marked another turbulent day in global financial markets. U.S. stocks plunged about 2.5 percent and investors fled from risky assets around the world. The euro, which this week hit a four-year low, was again under pressure.
Investors' anxiety still centers on Greece, but fears have grown that even the roughly $1 trillion emergency fund put together by the Europe Union and the International Monetary will not be enough to solve Europe's debt problems.
"Investors are aware that this package cannot ultimately relieve the need for real, and likely painful, fiscal reforms in the euro area," said Tarullo.
The remarks were an unusually detailed pronouncement on economic matters from a Fed governor who tends to focus on regulatory issues.
(Excerpt) Read more at news.yahoo.com ...
Daniel Tarullo, member of the Board of Governors of the Federal Reserve System, gestures before testifying before the Senate Banking, Housing and Urban Affairs Security and International Trade and Finance Subcommittee on Capitol Hill in Washington in this September 30, 2009 file photo. REUTERS/Molly Riley
That’s not what timmy geitner told us the other day.
timmah is one dumb sob.
LLS
Is Ben’s Helicopter headed for Paris?
How can Europe be having any problems since they are so heavily regulated? Doesn’t regulation work? /s
Gee, ya think?
Only dweebs from the liberal east actually thought Europe’s liberal idiots could not affect us.
I eagerly await the resurrection of the guillotine and will pay to see both Europe and our liberals get....truncated.
Yeah, don’t blame Obama. Blame Europe.
Translation: Obama is going to bail out the Euro.
The lower it goes the more imports they get.
Gosh,, if we are so interconnected in the economic sense, and one nation acting outside the norms could affect us all, we really need a global government to set fair rules for all.
Thanks Bush, Clinton, Bush II, and all the other one-world, new-world-order guys!!
Oh yes,, thats what this story really means.
That can't be true. I remember being told it was the economic policies of the Bush administration that caused the mess in 2008.
The fact is that the 50% who pay no income taxes at all will have to be paying something. Isn’t that the European way that the left loves so much?
Plus we need massive cuts in government spending on itself, pensions, entitlements etc
Amen. Now whats that called again? “Skin in the game?”
Hussein is the problem, too. Why won’t the idiots/sycophants/pantywaists at the FED say so? HUSSEIN MADE CALLS TO EUROPE TELLNG THEM TO BAIL OUT GREECE. HUSSEIN IS SPENDING TRILLIONS OF DOLLARS THAT DON’T EXIST.
For the FED to point the finger at EUROPE is laughable.
The world’s National economies are linked together like a house of cards with elitist “citizen of the world” pigs at the top of the heap. They are going to fall into the grips of the rest of the deck they invaded, abused and scammed. What idiots. It is going to be ugly.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.