Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson are to brief Congress on how to revamp the country's antiquated financial regulatory system.

They're weighing in Thursday morning before the House Financial Services Committee at a time when the housing and credit debacles have badly bruised the economy. The situation points to weak spots in the nation's regulatory structure that date back to the Civil War.

Paulson has put forward an ambitious overhaul that would turn the Federal Reserve into a super cop in charge of financial market stability. But the plan would remove the Fed from day-to-day banking supervision, which Bernanke opposes.

No action is expected this year on such a regulatory overhaul and the debate is likely to spill over to the next president and the next Congress.

However, the sudden demise of the once mighty Bear Stearns, which was forced to the edge of bankruptcy after a run on the investment bank, underscored how quickly fortunes can change and raised new questions about the effectiveness of the regulatory system.

The Fed's financial backing of JPMorgan Chase's takeover of the troubled firm also has drawn criticism from Democrats who call it government bailout that could put billions of taxpayer dollars at risk.

Bernanke in recent days has called for stronger oversight of big Wall Street firms, which are regulated by the Securities and Exchange Commission. Those firms have been given unprecedented — albeit temporary — access to tap the Fed for emergency loans, a privilege that has been granted for years to commercial banks, which are more tightly regulated.

With credit problems persisting, the Fed may extend the lending privilege to investment banks into next year, Bernanke has said.