Highlights: Bernanke's testimony

BERNANKE ON TALF:

"Going forward, in conjunction with the Treasury's plan, we're prepared to go up to $1 trillion in credit, with the next area we're going to look at being commercial mortgage-backed securities. We know right now there's a looming crisis in commercial real estate whereby owners of shopping malls, hotels, rental properties and many other types of buildings are unable to refinance or pay for new construction because the CMBS securitization market has completely shut down."

BERNANKE ON LARGE FINANCIAL FIRMS:

"We have no structure, no legal and regulatory structure that allows us to resolve in a safe and sound way a large financial international conglomerate. And we're much better off, frankly, trying to resolve it within the context of continued operations than to allow it to fail and to allow all the chaos that would occur following a bankruptcy."

BERNANKE ON AIG:

"We know that failure of major financial firms in a financial crisis can be disastrous for the economy. We really had no choice. And I share your concern, I share your anger. It's a terrible situation, but we're not doing this to bail out AIG or their shareholders certainly. We're doing this to protect our financial system and to avoid a much more severe crisis in our global economy."

"This does give us the best chance both to achieve financial stability and as well to ultimately recovery most or all of the investments that the public has made in AIG."

"If there's a single episode in this entire 18 months that has made me more angry, I can't think of one (other than) AIG. AIG exploited a huge gap in the regulatory system. There was no oversight of the financial products division. This was a hedge fund, basically, that was attached to a large, stable insurance company (that) made huge numbers of irresponsible debts, took huge losses. There was no regulatory oversight because there was a gap in the system."

"We have been doing what we can to break the company up, to get it into a salable position and to try to defang it. We've done a lot, for example, to take off some of these dangerous counterparty positions that would create the contagion. So we're doing all we can to make it, you know, a safer institution as well as trying to get it to stabilize."