U.S. Rep. Barney Frank fired back at former General Electric Co. chief executive Jack Welch yesterday, saying that the business legend just sat back while the financial markets collapsed.

“I’m skeptical of people who played a major role in the financial area and have nothing to say about the terrible mistakes that were being made - and now are complaining because we’re trying to correct them,” Frank (D-Newton) said last night.

Frank, chairman of the House Committee on Financial Services, was responding to harsh criticism by Welch, who told attendees of the Bank Administration Institute convention in Boston yesterday morning that efforts by Frank and the Obama administration to restructure the entire economy are “insane.”

“I desperately want more thought, so we don’t throw out some of the great things we have in this country,” Welch said to more than 1,000 bankers who watched the 73-year-old former GE boss via video hookup. “Right now, Barney Frank has the floor. He can send us down paths that might be bad for us. That’s frightening.”

But in an interview with the Herald yesterday, Frank asked, “What is he opposing exactly? Is he against the consumer protection agency? Maybe he’s against restraining credit card abuses. Is he against having hedge funds register with the Securities & Exchange Commission?

“Welch is right that President Obama and myself believe that it’s time to put some regulations in place to prevent a recurrence of what happened,” Frank said.