The US central bank is looking into Goldman Sachs's role in arranging contentious derivatives trades for Greece, which helped the country to massage its public finances, Ben Bernanke, chairman of the Federal Reserve, revealed yesterday.

“We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Mr Bernanke said, noting that the US Securities and Exchange Commission was also interested in the issue. However, Mr Bernanke did not give any more details about the investigations.

Testifying before Congress, the Fed chairman also criticised the use of financial instruments, such as credit default swaps (CDS), that destabilised a country or created runs against governments as “counterproductive”. Mr Bernanke's comments came as an official in German chancellor Angela Merkel's ruling Christian Democratic Union party said the G20 nations were discussing whether a ban on the speculative use of CDS was workable.