Yesterday's USA Today wrote, "Bernanke: U.S. money funds could still be hurt by Europe". The article said, "Federal Reserve Chairman Ben Bernanke says the threats from Europe's debt crisis have eased, but U.S. money market funds remain exposed to risky European assets. In testimony prepared for a congressional hearing Wednesday, Bernanke noted developments that have minimized the danger. He pointed to bailout support that European leaders provided in exchange for deep budget cuts by the Greek government and he highlighted the agreement by private creditors to reduce Greece's debt. But he said Europe must take further steps, including strengthening its banking system even more and making "a significant expansion of financial backstops" to guard against troubles in one country spilling over to other nations." The piece quoted Bernanke, "Europe's financial and economic situation remains difficult, and it is critical that the European leaders follow through on their policy commitments to ensure a lasting stabilization," in remarks prepared for the House Committee on Oversight and Government Reform." USA Today added, "While U.S. financial institutions have reduced their exposure to Europe, Bernanke said roughly 35% of assets in U.S. prime money market funds are in European holdings.
