Crash Economic

The Fed no longer give financial support to the European banking

WASHINGTON. Leader of the Federal Reserve (Fed) Ben S. Bernanke, said in front of Republican senators that the Fed does not intend to increase funding to the European banking.

Republican Senator from Tennessee, Bob Corker, said Bernanke's statement is very clear, no more additional loans to Europe from the Fed.

The Fed will only lend funds to banks in the U.S. territory. Even so, the Fed is still giving loans to the branches of U.S. banks outside the U.S. with the discount window.

Currency swaps also provide direct funding to banks in foreign countries through the European Central Bank (ECB) and other central banks are willing to bear credit risk.

Loans through swap facilities peaked in December 2008 amounted to U.S. $ 586 billion. Swap is separate from emergency loans to banks and companies reached U.S. $ 1.2 trillion in the same period, including loans from European financial institutions amounting to U.S. $ 538 billion.

"The U.S. must reduce aid to Europe, so that austerity measures of the European Union countries can run seriously," said Sen. Charles Crassle.