WASHINGTON — Two days before Congress rolls up its sleeves and begins to consider new regulation of financial markets, Federal Reserve Chairman Ben Bernanke called yesterday for additional powers to look more closely at investment banks with an eye toward preventing a future collapse of the global banking system.

When the head of the Fed calls for greater financial regulation, echoing Treasury Secretary Henry Paulson, a former Wall Street titan, it's significant. It signals a growing shift in the nation's capital toward embracing stronger regulation of financial markets after at least a quarter-century of a more hands-off approach.

"I think it is going to be a turn back towards more regulation, but it's not going to be so easy," said Barry Bosworth, a presidential adviser in the 1970s who's now a senior economics fellow at the Brookings Institution, a center-left research center. "I think they've got a dilemma that some of these new financial instruments, and markets, have become so complex. If they continue to let them operate, it's not clear that the regulators will be able to keep up."

Vincent Reinhart agrees. Until recently he was the chief economist of the Fed's interest rate-setting Open Market Committee. Reinhart, too, thinks that significantly stronger regulation is coming.

"I think it's quite possible that in the spring of next year, we will have the most significant re-regulation in memory, and I don't think it's (in the past) 25 years. I think it's 75 years, and you've got to go back to 1933" and the Great Depression, said Reinhart, who's now an analyst at the American Enterprise Institute, a conservative research center.

Bernanke signaled clear support for congressional and Bush administration efforts to bolster existing financial regulations when he spoke yesterday to a Federal Deposit Insurance Corp. forum outside Washington. He supported expanded Fed powers to guard against systemwide shocks to global finance, but cautioned that his agency needs Congress to grant it explicit authority, which it now lacks.

"The financial turmoil since August underscores the need to find ways to make the financial system more resilient and stable," Bernanke said.

The recent collapse of investment bank Bear Stearns is driving the push for new regulation. The Fed was forced to step in on March 14 and, over a single weekend, broker the fire sale of Bear Stearns to rival JP Morgan Chase. The Fed also opened its discount window, where it acts as the lender of last resort, to investment banks, which it doesn't regulate. This window traditionally has been open only to commercial banks, which are under the Fed's supervision.

The Fed lacked explicit authority to take over an investment bank, as former Fed Chairman Paul Volcker has suggested, but Bernanke maintains that the move was legal because the Fed has broad responsibility to protect the U.S. financial system from collapse.

Since then Treasury Secretary Paulson, a former chairman and chief executive officer of investment bank Goldman Sachs & Co., has offered a blueprint for revamping the regulation of financial markets. He recently said that some of his proposals shouldn't wait.

Tomorrow, the House Financial Services Committee will hold the first of several hearings on the state of financial market regulation and the safety and soundness of the banking system. Bernanke and Paulson are scheduled as the lead-off witnesses.

Before the hearings, Bernanke spelled out what he wants from Congress: a new, more robust framework for regulating investment banks, which aren't subject to supervision and capital requirements, unlike commercial banks.

The Securities and Exchange Commission has oversight of the holding companies that own investment banks, but the oversight is based on voluntary agreements with the banks.

"Strong holding-company oversight is essential, and thus, in my view, the Congress should consider requiring consolidated supervision of those firms, providing the regulator the authority to set standards for capital, liquidity holdings and risk management," Bernanke said.

Investment banks also are deeply involved in trading complicated financial products called over-the-counter derivatives. These transactions are often off balance sheets, free from any regulatory supervision. They're designed to transfer risk from a wide array of investments between two willing private parties.

The Bank of International Settlements estimates that the size of this market globally exceeds $500 trillion. For comparison, the entire U.S. economy produces about $14 trillion in goods and services each year.

The systemwide risk from derivatives became apparent during the sudden March meltdown of Bear Stearns. The Fed feared that allowing Bear Stearns to fail could lead to confusion over who owed what to whom in derivatives markets, sparking panic and a run on other investment banks and perhaps collapse in global financial markets.

In the months ahead, Congress will look at the trading in such complex instruments and try to determine where to regulate and perhaps what to prohibit.

"I think they are going to be forced openly to think about banning some of these instruments," economist Bosworth said.