Federal Reserve chairman Ben Bernanke will meet US senators today to counter concerns the Fed's decision to provide dollars to foreign central banks amounts to helping bail out debt-strapped nations.
A source familiar with the meeting said the Senate Banking Committee had invited Bernanke to discuss the international situation.
The Fed said on Sunday it was reopening currency swap lines with the European Central Bank and other central banks around the world to ease liquidity strains from an escalating sovereign debt crisis.
Fed officials say the swaps are necessary to protect the fragile US economic recovery from a serious shock that could result if the Greek fiscal crisis spreads.
Yesterday, the Fed, which has been criticised for lack of transparency in its emergency programmes, plans to make public contractual agreements it has with central banks including those of Switzerland, Britain, Japan and Canada, a Fed official said.
The Fed will publish details of activity in each of the swaps lines on a weekly basis, the official said.
Lawmakers have attacked the Fed for shielding details of emergency lending during the financial crisis of 2007-2008. The Fed finds itself in the politically sensitive position of responding to a new crisis in Europe even as Congress debates legislation mandating greater transparency in Fed programmes.
Reuters