The U.S. Securities and Exchange Commission is comfortable with capital levels at the five largest U.S. investment banks, including Bear Stearns Cos.

"We are reviewing the adequacy of capital at the holding company level on a constant basis, daily in some cases," SEC Chairman Christopher Cox told reporters on Tuesday after a news conference on greater cooperation with the Commodity Futures Trading Commission.

"We have a good deal of comfort about the capital cushions that these firms have been on," he said.
On Monday, speculation that Bear Stearns was facing a cash crunch drove
its stock down to a five-year low of $60.34. The investment bank moved to quash the rumors, saying its balance sheet, liquidity and capital remained strong.

Bear Stearns shares extended losses on Tuesday, falling more than 10 percent to $55.85 on the New York Stock Exchange.

Under a supervisory program, the SEC is in contact with investment banks Bear Stearns, Morgan Stanley, Lehman Brothers Holdings Inc, Merrill Lynch and Goldman Sachs. The program is designed to allow the SEC to monitor and respond quickly to any financial and operational weakness in the companies. (Reporting by Rachelle Younglai, Editing by Toni Reinhold)