Lawmakers, worried about the potential risks to the economy and banking system from largely unregulated investment funds, are beseeching top government officials for answers.

With some lawmakers unwilling to wait until an upcoming hearing on the near-collapse and $3.5 billion private bailout of a huge hedge fund, Long-Term Capital Management LP, the government's top securities regulator was facing questions Tuesday on Capitol Hill.Arthur Levitt, chairman of the Securities and Exchange Commission, was testifying at a hearing by the House Commerce finance subcommittee on another subject, mutual fund fees.

Some experts have maintained that ordinary investors are paying too much in complicated fees charged by the booming mutual fund industry, warning that people may feel cheated when the long-running bull market fizzles.

Levitt has said little publicly about the hedge-fund debacle since last week's rescue of Long-Term Capital by a group of major banks and brokerage firms, which was facilitated by the Federal Reserve Bank of New York.

"We are looking into the circumstances surrounding Long-Term Capital," he told reporters in New York on Monday.

Levitt said the SEC's main concern was the potential impact on investors of hedge-fund problems. He said it would be "premature" for him to comment further.

The funds attract only a handful of sophisticated investors, which is why they are able to largely escape government oversight.

Treasury Secretary Robert Rubin, meanwhile, tried to reassure markets that the near-demise of Long-Term Capital wasn't likely to lead to a broader credit crunch.

"I don't see why that should happen," Rubin said in response to a reporter's question Monday.

"I think that the issues are indicative of the kinds of problems that the world and international community and . . . financial authorities are dealing with as the world works itself through a very difficult time," Rubin said.

While hedge funds are largely unregulated, the Federal Reserve and the Treasury Department do have responsibility for the nation's banking system, which could be severely affected by a major hedge-fund collapse.

Rubin is chairman of the presidential Working Group on Financial Markets, established after the 1987 stock market crash. He said Friday he had asked the agencies making up the group - including the Fed, the Treasury and the SEC - to submit a report on hedge funds.

Rubin has declined to take a position on whether new government controls on hedge funds were needed, a question now being examined by lawmakers.