Bernanke: Feds Looking at Goldman Sachs Betting on Greek Debt Default

WASHINGTON -- Federal Reserve Chairman Ben Bernanke said Thursday the Securities and Exchange Commission is looking into Goldman Sachs and other Wall Street firms' use of  investment instruments to make bets that Greece will default on its debt.

Bernanke said the Fed is checking into the use of credit default swaps, a form of insurance against bond defaults. They are legally used as hedging instruments.

"Obviously using these instruments in a way that potentially destabilizes a company or a country is counterproductive and I'm sure the SEC will be into that," he said at the start of a Senate Banking Committee hearing.

The panel's chairman, Sen. Christopher Dodd, D-Conn., said he is troubled that this practice could worsen Greece's debt crisis.

The Associated Press contributed to this report.