By MARCY GORDON
AP Business Writer

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke appeared last week before a panel investigating the financial crisis to give his take on the meltdown and potential systemwide risks posed by large financial institutions.

He led the economy through tumultuous months of the most severe recession since the 1930s, as the Federal Reserve took extraordinary measures to inject hundreds of billions of dollars into the battered financial system.

And he said last week the central bank is prepared to make a major new investment in government debt or mortgage securities if the economy worsened significantly or if the Fed detected deflation - a prolonged drop in prices of wages, goods and assets such as homes and stocks.

Bernanke's scheduled appearance Sept. 2 at a hearing by the Financial Crisis Inquiry Commission came as the congressionally appointed panel approached the end of a yearlong investigation of the roots of the economic disaster.

At a session Sept. 1, the commission examined the danger of having banks deemed "too big to fail" and their potential to topple the financial system. The former chief of Lehman Brothers, Richard Fuld Jr., testified that the Wall Street titan could have been rescued in the fall of 2008 but federal regulators refused to help - even though they later bailed out other big banks.