WKYT | Lexington, Kentucky | News

Bernanke: Shut down banks if they threaten system

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke is telling a panel investigating the financial crisis that regulators must be ready to shut down the largest institutions if they threaten to bring down the financial system.

Bernanke says in testimony for a hearing Thursday: "If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved."

He says bailing out these institutions is not a viable solution.

Bernanke tells the Financial Crisis Inquiry Commission that great improvement will come from the new financial overhaul law. It empowers regulators to shut down firms whose collapse pose a broader threat, and international talks on new capital rules for banks.

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