Federal Reserve Chairman Ben Bernanke said he does not have total confidence in the LIBOR system for setting interest rates on financial transactions. The system, based in London, has been called into question recently over allegations that Barclays Bank of London tried to manipulate interest rates for its own financial gain. Chairman Bernanke defended the Fed’s response to the initial news of the scandal in 2008.
On the economy, Mr. Bernanke said the top two threats remain the European debt crisis and the fiscal situation at home, a reference to various tax increases and spending cuts set to take effect next January. Chairman Bernanke delivered his semi-annual testimony before the Senate Banking Committee