Bernanke endorses 'council' of financial regulators

The government should establish a "council" of regulators to oversee the financial services sector, Federal Reserve Chairman Ben Bernanke said Thursday.

In prepared testimony before the House Financial Services Committee, Bernanke endorsed the idea of a consolidated council comprised of members from different oversight agencies as the key regulatory output of the effort to revamp the nation's financial regulations.

"An oversight council made up of the agencies involved in financial supervision and regulation should be established, with a mandate to monitor and identify emerging risks to financial stability across the entire financial system, to identify regulatory gaps, and to coordinate the agencies' responses to potential systemic risks," Bernanke said in prepared testimony.

Bernanke said the council would encourage a more "comprehensive and holistic approach" to overseeing financial services, and rejected the notion that the Federal Reserve alone should serve as the central regulator in the economy.

The Fed chairman also backed the idea of new "wind down" authority for federal regulators, allowing them to take control of failing companies and methodically dismantle them, instead of allowing them to quickly implode as firms like Lehman Brothers did at the height of last fall's financial crisis.