Vocal Wall Street critic Sen. Elizabeth Warren, D-Mass., co-authored the Bailout Prevention Act. In a Wednesday release, she contended that the Fed's presence as a safety net could lead large banks to carelessness.
"If big financial institutions know they can get cheap cash from the Fed in a crisis, they have less incentive to manage their risks carefully — which further increases the chance of another financial crisis," Warren said.
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In response to Bernanke, bill co-author Sen. David Vitter, R-La., told CNBC, "Is anyone surprised that the mastermind of the taxpayer funded bailouts for the megabanks wants to protect his ability to keep bailing them out?"
The bill would make "common sense reforms to the Fed's emergency lending powers," Vitter said in a Wednesday release.
Warren's office did not immediately respond to a request to comment.
Bernanke's criticism of Warren's bill comes as the outspoken senator butts heads with President Barack Obama over trade policy. She has repeatedly criticized the Obama-backed fast-track trade promotion authority (TPA) for international trade negotiations.
Among other qualms, Warren has raised concerns about environmental and labor regulation enforcement. Speaking at a news conference Thursday, Obama said policy disagreements with Warren were not personal.
The Senate voted on Thursday to give Obama negotiating freedom for an 11-nation Pacific trade deal.