U.S. regulators will soon lay out rules governing financial firms so large their collapse could rattle global markets, Federal Reserve Chairman Ben Bernanke said.
Bernanke, in testimony prepared for a Thursday Senate Banking Committee hearing, also said regulators are looking into potential gaps in last year's Dodd-Frank financial oversight law, including the oversight of money market mutual funds and the tri-party repo system.
"The U.S. agencies are also working together to address structural weaknesses in areas not specifically addressed by the Dodd-Frank Act," Bernanke said.
The Fed chief is due to appear on a panel with other regulators at a hearing marking the one-year anniversary of the reform laws put in place after one of the most severe financial panics in U.S. history.
The effects of the crisis continue to affect the financial system around the world, the Fed chairman said.
"Nearly three years later, the recovery from the crisis in the United States and in many other countries remains far from complete," he said.
The reforms have stirred controversy among business leaders and many Republican lawmakers, who say the rules have overreached and had a chilling effect on business and job creation.
Bernanke said this summer the Fed will propose rules on tightened oversight of systemically important financial institutions, or SIFIs. Those rules are expected to include stricter capital and leverage requirements.
He also said regulators plan to finalize a rule on the "living wills" that SIFIs will have to submit to the government.
The living wills are blueprints for how the government can quickly and orderly dismantle a failing systemic firm.
Efforts among the Fed and other agencies to align domestic and international regulations are going well, Bernanke said. The Fed is on track to put international bank safety standards known as Basel III into effect on schedule, he said.
© 2017 Thomson/Reuters. All rights reserved.