On March 11, amid rumors that Bear Stearns was in trouble, Securities and Exchange Commission chairman Christopher Cox said he had "comfort" with the amount of capital held by five of the largest investment banks, including Bear Stearns. Two days later, Bear sought emergency funding from the Federal Reserve. By March 16, the following Sunday, the brokerage firm had been sold to JP Morgan in a government-backed fire sale.

As a result, the SEC has come under increasing criticism. Some say the agency didn't move quickly enough to spot risks in the market or at the companies it directly reviews. Treasury Secretary Henry Paulson, with the support of key Democrats, on Wednesday backed the idea of temporarily allowing the Federal Reserve to have an expanded role overseeing investment banks -- the SEC's traditional bailiwick. The Senate Banking Committee has scheduled for next week a hearing about the collapse of Bear, and likely will grill the agency.