Bernanke: Europe, U.S. debt are risks to economy (by Ronald D. Orol)

WASHINTON (MarketWatch) - Federal Reserve Chairman Ben Bernanke on Friday said that possible risks to the "current moderate recovery" in the U.S. relates to fiscal and sovereign banking issues in Europe, the need to take action to tame the U.S. deficit and unforeseeable events in the future. "One of the risks relates to whole set of issues with Europe and the fiscal and sovereign banking issues there," Bernanke said responding to a question after speaking at the National Association of Home Builders conference in Orlando. Bernanke added that it was critical for the U.S. to find a sustainable path forward for mounting debts and deficits, adding that it must be done in a way that does not restrain the ongoing economic recovery. Finally he added that there are other unknowns that could impact the global economy, adding that "we could not anticipate" the Japanese earthquake and tsunami in 2011 or the impact of continued political upheaval in the Middle East.