Forex News – Highlights of Bernanke news conference on Fed policy

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¬†Highlights from Federal Reserve Chairman Ben Bernanke’s news conference following the Federal Reserve policy meeting on Wednesday.

BERNANKE ON POSSIBLE POLICY STEPS:

“There are additional steps that can be taken and we have demonstrated through both communications techniques, guidance about future policy, which is something the Japanese have done as well, by the way – and through asset purchases, also something … Japan has done – that central banks do have some ability to provide financial accommodations to support the recovery even when the short-term interest rates are close to zero. That being said … these non standard policies are less well understood and they do have some costs and risks but I do think at the same time that they can be effective in helping the economy.”

 

ON NOT BUYING EUROPEAN DEBT:

“The Federal Reserve is not going to be buying European sovereign debt, except we have a very limited amount of European sovereign debts as part of our foreign exchange reserves and it comes primarily from a small number of countries. So that’s not something that we would be engaged in.”

ON MONITORING EUROPE, U.S. EXPOSURE:

“We have been monitoring the exposures of banks and other financial institutions to Europe. And of course monitoring the situation they are very closely, so we are hoping for the best. We are hoping that European policy makers will take the additional steps they need to take to stabilize the situation but we are prepared in case things get worse to protect the U.S. economy and the U.S. financial system.