During a House Financial Services Committee hearing Wednesday on the link between Federal Reserve supervision and monetary policy, Paul Volcker, chairman of the President's Economy Recovery Advisory Board and former chairman of the Federal Reserve said: "I do believe it would be a really grievous mistake to insulate the Federal Reserve from direct supervision of systemically important financial institutions. Something important, if less obvious would also be lost if the present limited responsibilities for smaller member banks were to be ended. The Fed’s regional roots would be weaker and a useful source of information lost."
For Federal Reserve Chairman Ben Bernanke's testimony click
For Volcker's prepared testimony click