Washington — The Federal Reserve is working to beef up oversight of financial companies to better protect the nation from another financial crisis in the future, Chairman Ben Bernanke said Wednesday.
The Fed chairman’s comments come as Congress moves closer to sending President Barack Obama a final legislative package that revamps the nation’s financial structure to prevent a replay of the recent financial crisis.
Bernanke welcomed key parts of that package in remarks prepared for delivery to a conference in New York. But Bernanke emphasized that the Fed is moving ahead on its own reforms.
For instance, the Fed is working to strengthen capital requirements for banks so that they’ll have bigger and better cushions to protect against any potential losses. And, the Fed is collecting more information on linkages among financial companies to better identify potential channels of financial contagion.
One of the lessons learned from the crisis is that the Fed can’t focus solely on the safety and soundness of individual banks, but rather on the health of the financial system as a whole, Bernanke said. The Fed has already moved to examinations that take this broader-picture approach.