No copy of the letter is currently available - story just hit the wires about 10 minutes ago. Bernanke claims to have access to confidential information to back up his story. We wonder if the Chairman has given any thought to the possibility that regulators are not aware of off-balance sheet exposures. It wouldn't be the first time that the Federal Reserve would be in the dark about banks under their purview. Repo 105s and Lehman comes quickly to mind.
WASHINGTON (MarketWatch) -- The exposure of U.S. banks to Greece, Ireland and Portugal is manageable and quite small, Federal Reserve Chairman Ben Bernanke told U.S. Senator Bob Corker in a letter written in July that was released Tuesday. The nearly $200 billion exposure the Bank for International Settlements has reported capture only one side of banks' credit-default swap exposure, Bernanke said. Confidential supervisory information and CDS data from the Depository Trust & Clearing Corp.'s trade information warehouse indicate that the exposures are "quite small." Bernanke does note a sovereign credit event could affect a broad range of markets and financial institutions.
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