Bernanke testifies to Congress (via Calculated Risk):

Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy. Fostering healthy growth and job creation is a shared responsibility of all economic policymakers, in close cooperation with the private sector. Fiscal policy is of critical importance, as I have noted today, but a wide range of other policies--pertaining to labor markets, housing, trade, taxation, and regulation, for example--also have important roles to play. For our part, we at the Federal Reserve will continue to work to help create an environment that provides the greatest possible economic opportunity for all Americans.

Emphasis added. Didn't a lack of regulation get us into this mess? The housing bubble was allowed to inflate and an unregulated shadow banking system that's vulnerable to a Diamond-Dybvig-type crisis was allowed to arise. So when the bubble popped we had a classic bank run. And yet too much regulation is a problem?

It wouldn't be too much of a problem if he had adequate fiscal and monetary policy. But Republicans are blocking fiscal stimulus and the Fed feels its doing enough as long as the economy doesn't sink into a deflationary trap.