Federal Reserve Chairman Ben Bernanke, in a Senate hearing that could sway a clamorous debate over the power of the central bank, admitted mistakes in managing the economy but declared that his actions helped save America from another Great Depression.

The hearing was to consider whether Mr. Bernanke should get a second four-year term as chairman of the Fed, but it was as much about the future of the institution as his role at the helm. The central bank steers the economy by setting short-term interest rates and providing emergency loans to banks.

The Fed's standing has been wounded by the crisis in the financial system that it helped regulate and by the popular uproar against the bailouts it orchestrated. Mr. Bernanke argued Thursday, as he has for months, that his actions averted a far-worse crisis.

Senators countered the Fed shouldn't have let the U.S. economy reach such a perilous point.

"For many years I held the Federal Reserve in very high regard," said Sen. Richard Shelby of Alabama, senior Republican on the Senate Banking Committee. "I fear now, however, that our trust and confidence were misplaced."

"There were mistakes made all around," Mr. Bernanke said. "I did not anticipate a crisis of this magnitude and this severity."

"We should have required [banks to hold] more capital, more liquidity," Mr. Bernanke added. "We should have required more risk-management controls." He also said the Fed was "slow on some aspects of consumer protection."

Mr. Bernanke is expected to win confirmation. But a vote might not come quickly. Sen. Christopher Dodd (D., Conn.), chairman of the banking committee, said he wasn't sure whether Mr. Bernanke could be confirmed before Christmas.

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