That probably won't appease lawmakers who've said they're still concerned the central bank might abuse its powers as the lender of last resort.

The Fed is required to write rules that eliminate some of its sweeping emergency lending authority and plans to complete the long-delayed regulations by the end of this month. The measure stems from the 2010 Dodd-Frank law, which limited the Fed's ability to prop up banks.

But after the Fed released an initial proposal almost two years ago, a bipartisan group of lawmakers including Democratic Senator Elizabeth Warren complained that it didn't go far enough and left regulators too much wiggle room to orchestrate a backdoor bailout that violates the intent of Congress. Yellen, testifying before a House panel this month, rejected the idea that the Fed should relinquish its role as potential savior in a crisis.

"We regard our emergency lending powers as very crucial," Yellen told the House Financial Services Committee on Nov. 4. The Federal Reserve was created to "provide liquidity when there's a financial panic," she added.

The debate is part of Yellen's tug-of-war with a Congress that wants to rein in the Fed's influence over the U.S. economy and financial system. 

Reckless Behavior

Warren and other lawmakers argue the expectation that the Fed will rescue failing banks, incentivizes reckless behavior on Wall Street. Lawmakers also are trying to shrink the number of banks that receive heightened supervision from the Fed and are threatening to boost Congress' authority over the Federal Reserve Bank of New York, which oversees giant U.S. lenders such as JPMorgan Chase & Co. and Citigroup Inc. Republicans led by Senate Banking Committee Chairman Richard Shelby want the Fed to disclose more information about its decisions on setting interest rates.