WASHINGTON — Only a few hours after regulatory reform was signed into law Wednesday, Federal Reserve Board Chairman Ben Bernanke assured lawmakers the central bank was well along toward implementing many of its biggest provisions.

Testifying before the Senate Banking Committee, Bernanke said the Fed has already begun enhancing its supervision of large, complex bank holding companies, upgrading the tools it uses to keep track of the financial sector and identifying potential systemic risks.

The Fed chairman also noted that briefings prepared for meetings of the Federal Open Market Committee, the central bank's monetary policymaking body, are giving "increased coverage and analysis of potential risks to the financial system." This helps the Fed make more effective monetary policy decisions and to enhance financial stability, he said.

Even with such efforts by the central bank, however, Bernanke cautioned lawmakers that the work ahead is mammoth in scope.

"Much work remains to be done, both to implement through regulation the extensive provisions of the new legislation and to develop a macroprudential approach called for by Congress," Bernanke said in prepared remarks.

The reform legislation, which was signed into law Wednesday morning by President Obama, will put the U.S. financial system on "a sounder foundation and minimize the risk of repetition of the devastating events of the past three years," Bernanke said.

The Fed, which was often accused of failing to use its powers to prevent the financial crisis, ended up not only keeping those powers but also gaining new ones under the law. "The Federal Reserve is one of the institutions on which Congress will rely most heavily. The additional authority it has been given is remarkable," said Senate Banking Committee Chairman Chris Dodd, D-Conn.

The law requires the Fed, among other duties, to complete regulations on capital and liquidity within 18 months of its enactment, conduct annual stress tests for systemically important companies and adopt a ban on proprietary trading by banks.

Dodd, who acknowledged his past criticisms of the Fed, said the central bank will be central to maintaining financial stability.

"I think it is fair to say that the success of financial reform law depends in large measure on how the Fed meets its new responsibilities. It is my fervent hope that, under your stewardship, the Fed will exercise these authorities wisely," Dodd said.

The new law will require the Fed to write more than 50 rules on such things as risk-based capital, leverage and liquidity requirements. Sen. Judd Gregg, R-N.H. said the central bank must move quickly to ensure the market is not spooked while it waits for the new regulations.

"There is going to be a period here where a lot of the banking industry is not going to know what kind of capital reserves it should be holding, which will constrain its willingness to go out and lend," Gregg said.

Bernanke responded that these were "legitimate concerns."

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