U.S. regulators are considering capital surcharges for large banks based on institutions' sources of funding, Federal Reserve Governor Jerome Powell said on Thursday.

U.S. regulators are considering ways to prevent banks from growing so large that they could cause a financial crisis if they failed.

"One of the things we're looking at is the short-term wholesale funding aspect of these large institutions," Powell told U.S. lawmakers during a hearing regarding his nomination for another term on the Fed's Board of Governors.

"One of the ways to get at that is through some kind of a capital surcharge based on exposure to short-term wholesale funding," Powell said, adding that no decision had been made.

(Reporting by Washington newsroom and Ann Saphir in San Francisco; Editing by Chizu Nomiyama)