06/27/2011 - U.S. bank regulators are studying whether the European sovereign debt crisis could have spillover effects on the U.S. financial system, a top Federal Reserve official said Monday.

While U.S. financial firms appear well positioned to absorb broad shocks from a European debt default, it is harder to estimate the after-effects, said Patrick Parkinson, the head of the Federal Reserve's division of supervision and regulation.

Direct exposure of U.S. banking firms to peripheral Europe is not large. A deeper worry is that a default by a European economy could have a much broader impact on financial markets and the global economy, Parkinson said.

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``We've been taking a good long hard look at this,'' Parkinson said at a conference sponsored by the Pew Charitable Trusts and New York University. ``Where things can go awry is when in fact we have contagion effects that spread.''

Read the full article, Euro Crisis Contagion Is a Worry for Fed, on Fox Business's Web site.

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