AFP - The Federal Reserve will expand its so-called stress tests of the banking system to ensure they have enough capital during difficult periods, Fed chairman Ben Bernanke said Friday.

Bernanke highlighted the positive impact of stress tests conducted earlier this year on major banks, a move aimed at ensuring their financial health and building confidence.

"Building on the success of this initiative, we will conduct more frequent, broader, and more comprehensive horizontal examinations, evaluating both the overall risk profiles of institutions as well as specific risks and risk-management issues," Bernanke told a conference organized by the Boston Federal Reserve.

The highly publicized stress tests conducted earlier this year focused on 19 major banks, and indicated 10 needed additional capital.

Bernanke said the Fed would step up efforts to review bank capital requirements to avoid a recurrence of the credit crisis that has spread around the world.

"Additional steps are necessary to ensure that all banking organizations hold adequate capital," he said.

He noted that the Financial Stability Board -- a global watchdog made up of senior representatives of national financial authorities -- had called for "significantly stronger capital standards," and that the Group of 20 "has committed to develop rules to improve both the quantity and quality of bank capital."

"The Federal Reserve supports these initiatives. The structure of capital requirements should also be reviewed," Bernanke said.

"For example, to reduce the tendency of current capital requirements to promote credit growth in booms and to restrict credit during downturns, the Federal Reserve has supported international efforts to develop capital standards that would be countercyclical," or require firms to build larger capital buffers in good times and allow them to be drawn down in times of stress.

Bernanke repeated his call for financial firms outside the banking system to be placed under the purview of regulators to limit risks to the global system.

He said that regulators should have "a new resolution regime for non-banks, analogous to the regime currently used by the Federal Deposit Insurance Corporation for banks," to allow authorities to wind down a systemically important firm.

Bernanke stopped short of offering specifics, but said these firms should pay an assessment to cover the costs of regulation.

"Any resolution costs incurred by the government should be paid through an assessment on the financial industry and not borne by the taxpayers," he said.