Top U.S. economic officials told Congress Thursday that new regulatory
powers are needed to protect the nation's financial system if a big
investment company were to collapse.
Treasury Secretary Henry
Paulson and Federal Reserve Chairman Ben Bernanke spoke to the House
Financial Services Committee which is debating the best way to deal
with that scenario and other problems as they overhaul the country's
The discussions took place at the same time a
new crisis developed for the two biggest companies that own or
guarantee home mortgages in the United States.
The price of
shares in "Freddie Mac" and "Fannie Mae" plunged as investors worried
they could lose money because the firms have been badly hurt by the
Treasury Secretary Paulson said the companies
are working through a "challenging period" but told Congress they are
"adequately capitalized" have enough money.
Fannie and Freddie
are government-chartered companies set up to help increase home
ownership by increasing the amount of money available for mortgage
Some information for this report provided by AP, Reuters and AFP.