Senate Banking Chairman Christopher J. Dodd suggested Thursday that he has reservations about empowering the Federal Reserve to guard against widespread systemic risks to the economy.

Lawmakers have vowed to rewrite the nation’s financial regulatory system amid the worst financial crisis since the Great Depression. As part of that overhaul, many lawmakers and regulators agree that Congress needs to create a new agency, or empower an existing one, to guard against so-called systemic risks.

So far, the Fed has emerged as the leading contender to assume this new role. But Dodd, D-Conn., has remained skeptical, and on Thursday he seemed to reaffirm those doubts.

“Whether or not those vast powers will reside at the Fed remains an open question,” Dodd said at a Banking, Housing and Urban Affairs Committee hearing on the financial regulatory overhaul. Dodd noted that the Fed needs to focus on monetary policy and its efforts to buttress ailing credit markets.

“And that is to say nothing of its increasing number of responsibilities, and the obvious mistakes the Fed made in the run-up to the current crisis,” he said.

However Congress moves forward, the new regulator likely will have the power to watch over the sprawling international financial companies that have come under severe pressure during the current crisis.

With many of those companies doing business across the entire financial market, current regulators say they had difficulty figuring out how much risk these huge companies were taking on.

Dodd seemed wary of granting the Fed new powers when the central bank had mismanaged its existing authorities. “From its failure to protect consumers, to regulate mortgage lending, to effectively oversee bank holding companies, the instances in which the Fed has failed to execute its existing authority are numerous.”

Ultimately, Dodd seemed most concerned about concentrating even more power in the Fed’s hands. As it stands now, the Fed is generally considered to be the single most powerful financial institution in the world.

“This crisis has illustrated all too well the dangers posed to the consumer and our economy when we consolidate too much power in too few hands with far too little transparency and accountability,” Dodd said.

‘Not a Panacea’

Critics of the Fed have often assailed its opaque operations and decision-making process.

But Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila C. Bair warned that creating a new regulator may not be an easy solution to the problem of systemic risk.