* Bernanke saw threat to US banks if no action--Shelby * Not a lot of push back on swaps from senators--Corker * Fed making case that no dollars will be lost on swaps (Recasts with comments from senators)
WASHINGTON, May 11 (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday described the Greek debt crisis as a European problem but one that could have hit U.S. banks if left unattended, a senior Republican senator said.
Chairman Bernanke explained what was going on in Europe, it was basically a European problem but with ramifications probably on a lot of our banks and our banking system if there was no intervention, Senator Richard Shelby told reporters after a closed-door briefing Bernanke provided lawmakers.
Bernanke met with senators to counter concerns the Fed's decision to provide dollars to foreign central banks amounts to helping to bail out debt-strapped nations. The Fed's action buttressed a European-led $1 trillion plan announced on Monday to stop Greece's debt crisis spreading.
The Fed used similar currency swap lines to battle the global financial crisis. At the time, some lawmakers criticized the effort to ensure dollar liquidity in overseas markets as putting U.S. taxpayer money at potential risk.
The Fed on Monday posted frequently asked questions about currency swaps on its website noting dollars the Fed provides would be paid back in full by other central banks, a message repeated by Bernanke on Tuesday.
This is not a loan by U.S. taxpayers but a liquidity vehicle, Republican Senator Bob Corker said after the briefing. Based on information I have today, it seemed to me it is a standard procedure that central banks engage in with each other.
The politically touchy move by the Fed is at a difficult time for the central bank. It is already battling efforts on Capitol Hill to remove it from overseeing smaller banks and to open up monetary policy to congressional audits.
The Senate on Tuesday was poised to vote on an amendment to a wide-ranging financial reform bill that would allow a one-time audit of the Fed's emergency lending during the financial crisis. Initially, the amendment would have allowed repeated audits, but the Fed and its allies in the Senate and Obama administration successfully fought that off.
Fed officials say the currency swaps are necessary to protect the fragile U.S. economic recovery from a serious shock that could result if the Greek fiscal crisis spreads.
The U.S. central bank said on Sunday it was reopening currency swap lines with the European Central Bank, the Bank of Canada, the Bank of England and the Swiss National Bank. On Monday, it reopened a swap line with the Bank of Japan.
In an effort to bolster its case that no taxpayer funds are at risk, the Fed on Tuesday plans to make public contractual agreements it has for the reopened swap lines, a Fed official said. The Fed will publish details of activity in each of the swaps lines on a weekly basis, the official added. (Writing by Mark Felsenthal and Tim Ahmann; Editing by Andrew Hay)