Federal Reserve Chairman Ben S. Bernanke said the government must avoid imposing burdensome rules on financial companies as it carries out the biggest regulatory overhaul in seven decades.

"No one's interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit," Bernanke said today in a speech in Chicago. "Regulators must aim to avoid stifling reasonable risk-taking and innovation in financial markets, as these factors play an important role in fostering broader productivity gains, economic growth, and job creation."

Bernanke and Fed officials are trying to balance the need to reduce the risk of repeating the 2007-2008 financial crisis with the aim of reviving the U.S. economy after the worst recession since the Great Depression. The central bank, under last year's Dodd-Frank Act, was given the job of overseeing the biggest financial companies.