2  Ben S. Bernanke (2012), “Semiannual Monetary Policy Report to the Congress,” statement before the Committee on Financial Services, U.S. House of Representatives, February 29. 2  BIS central bankers’ speeches  (including, potentially, the flexibility to recapitalize banks directly rather than through loans to sovereigns), and movement toward unified supervision of euro-area banks.
Even with these announcements, however, Europe’s financial markets and economy remain under significant stress, with spillover effects on financial and economic conditions in the rest of the world, including the United States. Moreover, the possibility that the situation in Europe will worsen further remains a significant risk to the outlook. The Federal Reserve remains in close communication with our European counterparts.