WASHINGTON, July 10, 2008 (AFP) - Federal Reserve chairman Ben Bernanke urged Congress Thursday to require stricter regulation of Wall Street firms in the wake of the near-collapse of Bear Stearns earlier this year.

Appearing before the House Financial Services Committee, the Fed chief said the meltdown at Bear Stearns, which was bought for a pittance ahead of a near collapse, highlighted loopholes in the regulatory structure.

He said the Fed and Securities and Exchange Commission had agreed with major Wall Street firms on a voluntary oversight plan but that more was needed.

'In the longer term ... legislation may be needed to provide a more robust framework for the prudential supervision of investment banks and other large securities dealers,' he said.

He said Congress 'should consider requiring consolidated supervision of those firms and providing the regulator the authority to set standards for capital, liquidity holdings and risk management.'

The new regulatory push comes as the finance industry has weathered tens of billions of dollars in losses from speculation on US real estate before the boom turned into a bust.

Among the most hard hit was Bear Stearns, an 85-year-old investment giant sold for a bargain-basement price of one billion dollars to JPMorgan Chase in a deal engineered in March by the Federal Reserve to avert a collapse that some feared could create a financial tsunami.

Bernanke noted that Congress may also consider 'new tools' to allow an 'orderly liquidation' of a securities firm on the brink of bankruptcy.

He added that one possibility would be to implement a system used for failing banks in which regulators appoint a receiver to supervise the process.