Sheila Bair, who is stepping down as chairman of the Federal Deposit Insurance Corp. this week, leaves behind an agency transformed from a sleepy bank overseer into a financial regulatory powerhouse focused on preventing another financial crisis.

At her last FDIC meeting Wednesday, the agency finalized a rule allowing the government to recover compensation from executives responsible for a financial firm's collapse. The rule is one of many Ms. Bair successfully pushed through in the wake of the 2008 financial crisis to try and mitigate risk-taking by financial firms and their leaders.

Her aggressive, sometimes combative style helped win broad new powers and an international profile for the FDIC, including the ability to police, take over and dismantle large, complex financial institutions that were never before in the agency's purview. At the same time, she has managed to draw praise from Republicans and Democrats on Capitol Hill—a notable feat in a partisan town and something that has helped empower the FDIC.

"She's had a positive effect on the agency in terms of raising its profile and energy level," said William Isaac, a former FDIC chairman.

Ms. Bair is not without critics. She has ruffled feathers in the banking sector and among fellow regulators and taken some controversial steps, including seizing Washington Mutual Inc. in a move the bank's shareholders and bondholders said was unnecessary.