WASHINGTON — Federal Reserve Chairman Ben Bernanke and other regulators gave Congress an update Thursday on their efforts to implement the biggest overhaul of the nation’s financial rules since the Great Depression.
In testimony to the Senate Banking Committee, Bernanke said the Fed will unveil new regulations this summer that would protect the U.S. economy from another meltdown of the nation’s largest banks and financial companies.
Congress directed the Fed to write the rules when it passed last year’s financial regulatory overhaul. The law aims to prevent another financial crisis like the one in 2008 that plunged the economy deeper into recession.
The rules will require big banks and others, such as Wall Street firms, hedge funds and insurance companies, whose failure could endanger the economy, to be subject to more strict requirements for the amount of capital and cash they must have on hand to cushion against potential losses if another financial crisis were to strike.
“Our goal is to produce a well-integrated set of rules that meaningfully reduces the probability of failure of our largest, most complex financial firms, and that minimizes the losses to the financial system and the economy if such a firm should fail,” Bernanke said in the testimony.
Bernanke also acknowledged that some small banks could be hurt if regulators allow them to charge more than big banks for processing debit- card transactions.
The higher fees, paid by retailers each time Americans swipe their cards, could make debit cards issued by smaller banks less attractive to merchants.
