Federal Reserve Chairman Ben Bernanke, facing one of his toughest grillings yet by U.S. lawmakers on Thursday, denied he had ever threatened to fire Bank of America management if they pulled the plug on a planned merger with Merrill Lynch.

I did not tell Bank of America's management that the Federal Reserve would take action against the board or management, Bernanke told the House of Representatives Oversight and Government Reform Committee.

Bernanke also said neither he nor other Fed officials had ever directed, instructed, or advised the bank to withhold information about Merrill's mounting losses from the public, another charge lawmakers have leveled at the U.S. central bank.

Lawmakers from both major parties pressed Bernanke about his conversations with Bank of America chief Kenneth Lewis and whether he or then-Treasury Secretary Henry Paulson had coerced the bank to go forward with the deal.

Under repeated questioning, Bernanke also said he had not directed Paulson to threaten to fire management if Bank of America backed out of its planned purchase.

The top Republican on the panel, California Rep. Darrell Issa, on Wednesday had charged the Fed had covered up its involvement in the merger and deliberately hid important details from other federal regulators.

The Fed has faced intense scrutiny and questioning from Congress regarding many of the extraordinary actions it took during the financial crisis that began in the summer of 2007.

The probe into the merger comes as lawmakers debate an Obama administration proposal to overhaul financial oversight that would expand the Fed's powers over banks and the financial system as a whole.

Issa and other lawmakers zeroed in on an email from Richmond Federal Reserve Bank President Jeffrey Lacker, who wrote that the Fed chairman had told him he intended to make it clear to Bank of America management that if they went forward with actions to end the merger and needed government assistance management is gone.

He is saying, in a nutshell, you planned to make a threat, Issa said.

Bernanke repeatedly said he could not remember the details of the conversation, but noted he never threatened Lewis.

I never did make a threat. I never did raise this issue with Ken Lewis, Bank of America, he said.

However, the Fed chairman said that if Bank of America invoked a merger-halting material adverse change clause and eventually also needed a government bailout, the firm would likely have experienced some sort of repercussion.

If somebody makes a decision that results in their company failing and being rescued by the government, there should be consequences, he said.

Towns, a Democrat from New York, said the panel was not even close to wrapping up its probe into the deal and regulators' actions surrounding it.

Before Congress acts on the financial services reform proposal, we need to have a thorough understanding of what caused the current financial crisis and how the federal government responded, he said.

Paulson has also been called to testify next month.