Fed’s Evans: Closely Studying Global Crisis’ Impact on US Mkt

By Suzanne Cosgrove

BLOOMINGTON, Illinois (MNI) – Chicago Federal Reserve Bank
President Charles Evans said Friday the austerity package required of
Greece and several other troubled nations to qualify for the rescue
package forged by European Union finance ministers and the International
Monetary Fund would be “painful for each individual country, and painful
for the EU economy.”

However, if their “deficits are large, those imbalances have to be
addressed,” he added, responding to questions following a speech at
Illinois Wesleyan University,

He repeated that the sovereign debt crisis would affect global
demand, but said he was “hopeful that impact would be modest” for the
U.S. economy. He said “we are all looking very carefully” at its
exposure to the U.S. market.

Evans called the upward of $1 trillion European rescue package
“forceful” and “aggressive,” and a “good bridge.”

As for the Federal Open Market Committee’s decision to extend
dollar swap agreements to European nations, Evans commented that “we
need to provide liquidity, but not venture too far

“We’re there to insure the health of the U.S. economy,” he added.

Asked by reporters about regulatory reform expected to be
considered by the Senate next week, Evans said he favors legislation
that allows the Fed to continue its supervisory role. The Fed needs to
remain active on all sides of banking regulation, he said.

Evans was more sanguine about the Sanders amendment requiring a
one-time audit of the Fed, saying that the Fed needs to remain as
transparent as possible.

** Market News International **

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