Fed Chairman Ben Bernanke made his strongest case yet to Congress on Wednesday for the Federal Reserve keeping its regulatory oversight powers over banks large and small.
Bernanke told the House Financial Services panel he's "quite concerned" about proposals to limit the Federal Reserve's regulatory power to watching out for only the biggest banks. He called the proposal a "bad idea."
"It makes us the 'too big to fail' regulator, and we don't want that responsibility," Bernanke said. "We need a connection to Main Street, as well as Wall Street."
Bernanke said the Fed, alone, has the infrastructure and expertise to keep a close eye on big banks as well as regional and community banks. He suggested that losing the ability to monitor smaller banks would impact the Fed's role in stablizing the economy.
"The Federal Reserve's participation in the oversight of banks of all sizes significantly improves its ability to carry out its central banking functions, including making monetary policy, lending through the discount window, and fostering financial stability," Bernanke said.