U.S. Federal Reserve Chairman Ben Bernanke said on Friday regulators are considering a capital surcharge on large banks to reduce the risks that any one firm's problems could destabilize the financial system.

In his most detailed description of the Fed's new approach to regulation in the aftermath of the financial crisis, Bernanke said regulators in the United States and abroad are also considering requiring that a greater share of bank capital be held in the form of common equity.

Some firms might also be required to issue contingent capital, a debt-like security that can convert to equity in times of stress, he told a conference sponsored by the Boston Federal Reserve Bank.

Additional steps are necessary to hold adequate capital, Bernanke said.

To beef up oversight that he acknowledged had fallen short in spotting risky practices which contributed to the meltdown, Bernanke said the central bank would conduct more comprehensive reviews of banks and demand more reporting.

(Reporting by Kristina Cooke and Ros Krasny; writing by Mark Felsenthal; Editing by Andrea Ricci)

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