Ben Bernanke Advises Senate Democrats on Euro Turmoil, Housing Crisis

Posted October 20, 2011 at 6:26pm

Federal Reserve Chairman Ben Bernanke met with Senate Democrats today to discuss the euro crisis and domestic economic issues, including the housing crisis.

Bernanke, whom Democrats invited to the Capitol for their weekly policy lunch, spent more than an hour speaking with lawmakers, as European Union leaders continued to be deadlocked on how to deal with a growing financial crisis. They are slated to convene this weekend to hash out their differences.

“He gave us an analysis of what’s going on in Europe. There are some critical decisions being made over there that could have impact in the United States,” Senate Majority Whip Dick Durbin (D-Ill.) said as he emerged from the meeting.

Asked how Bernanke explained the euro crisis, the No. 2 Senate Democrat said: “Of course, it is worrisome. It impacts our economy. He has urged the leaders in Europe to take it very seriously. But he’s not alone. Other countries from around the world are joining that course. This is not confined to any specific countries in Europe or even the eurozone — it really has a reach beyond that.”

Bernanke and the Senators considered the different ways that the United States could be made vulnerable by Europe’s financial crisis, Sen. Mark Warner said.

“I got assurance [on] one of the things I was concerned about, is we’ve got a lot of bank exposure to Europe, to Greece particularly, but we’ve thought about, ‘What are the other exposures?’” the Virginia Democrat said.

Senators also discussed domestic issues, with a focus on housing. Sen. Dianne Feinstein said Bernanke told the room that Congress will receive a list of “legislative recommendations” next week.

It was not immediately clear from the California Democrat’s remarks whether the suggestions would come from the Federal Reserve or the administration, but Senate leadership aides suggested that the Federal Housing Finance Agency may soon unveil new recommendations. None could confirm the nature of the talks inside the Conference lunch or whether Bernanke was referring to the expected FHFA announcement.

The timing would be beneficial for President Barack Obama, who is slated to pitch his jobs bill on the West Coast next week and will make a stop in Nevada, which has one of the highest foreclosure rates in the nation.