Testifying before the House Committee on Financial Service, Federal Reserve Chairman Ben Bernanke called for the consolidated supervision of investment banks and the creation of a tool to liquidate failed financial firms.

Bernanke also advocated that the Federal Reserve should have authority over payment systems.

"Because robust payment and settlement systems are vital for financial stability, the Congress should consider granting the Federal Reserve explicit oversight authority for systemically important payment and settlement systems," said Bernanke.

Bernanke commented that the Federal Reserve's ultimate goal is to reduce the need for government intervention.

By Steve Stecyk and edited by Cristina Markham