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Tuesday
Sep062011

Just Released Bernanke Letter Downplays U.S. Banks CDS Exposure To Euro Sovereign Debt

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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Related story:

LEHMAN ACCOUNTING FRAUD: Attention Prosecutors: Watch This Video About Lehman, Geithner, Fuld & The New York Federal Reserve

 

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Reader Comments (3)

"Bernanke claims to have access to confidential information to back up his story."

Speaking of Lehman, Geithner had said same access to their confidential information, conducted 3 stress tests, and decreed them fit as a fiddle.

How'd that diagnosis turn out?

While alive, Lehman's most desperate plea was that it need $20 billion. Turns out $600 billion was the water line. Ooops.

Incredibly, there are still people around who believe the official bullshit, or they wouldn't keep generating it.
Sep 6, 2011 at 3:22 PM | Unregistered CommenterCheyenne
Given the size of the Euro CDS market, I find it hard to believe that Bernanke and the Fed have any true idea of Us banks exposure. This was a shot in the dark.

CFTC Chairman Gary Gensler Says More Resources Needed To Police $340 TRILLION Derivatives Market

http://dailybail.com/home/video-cftc-chairman-gary-gensler-says-more-resources-needed.html
Sep 6, 2011 at 3:35 PM | Registered CommenterDailyBail
Here's more on the Bernanke letter from CNBC:

http://www.cnbc.com/id/44411981
Sep 7, 2011 at 11:00 AM | Registered CommenterDailyBail

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