"U.S. Bank Exposure To Europe Could Reach $4 Trillion"
American banks have only “moderate” direct exposure to the European countries currently seeking bailout relief, but adding exposure to wounded economies in Italy and Spain, indirect exposure through European banks, and credit default swaps, the sum of American exposure rises to roughly $4 trillion. The U.S. is attempting to erect firewalls to protect its banks from a further deepening of the European fiscal crisis, with policymakers urging financial institutions to scale back such exposure. Last week, Federal Reserve Chairman Ben Bernanke indicated that the U.S. couldn’t avoid ill effects from a widening of the European crisis. “It is not something that we would be insulated from,” he said. “I don’t think we would be able to escape the consequences of a blow-up in Europe.”