Federal Reserve Chairman Ben Bernanke, says the central bank is looking into Goldman Sachs and other Wall Street firms’ use of a sophisticated investment instrument to make bets that Greece will default on its debt.
Mr. Bernanke says the Fed is looking into companies’ use of credit default swaps, a form of insurance against bond defaults. He made the comments at the start of a Senate Banking Committee hearing.
The panel’s chairman, Sen. Christopher Dodd, says he is troubled that this practice could worsen Greece’s debt crisis.
