Federal Reserve Board Chairman Ben Bernanke blasted American International Group at a Senate hearing today, saying “nothing has made me more angry” than AIG's ability “to exploit a huge gap in the regulatory system.”

Mr. Bernanke made his comments while testifying before the Senate Budget Committee hearing on President Barack Obama's proposed budget for the remainder of fiscal-year 2009.

Mr. Bernanke used the occasion to suggest, as he did last week, that the Obama administration expand the authority of the Federal Deposit Insurance Corp. to deal with large, troubled financial institutions, such as insurance companies, securities firms, hedge funds and mutual funds, that aren't banks.

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