Heat EVOO with bay leaf in lg. saucepan over med-low heat. Add fennel. Season with salt. Cover and cook until fennel is tender, approx. 15 min. Remove bay leaf.
Pour wine over fennel. Stir in peppers, onion, tomato, garlic, and capers. Season with salt. Add vinegar. Cover and cook until peppers are tender, stirring occasionally, approx. 30 min. Garnish with basil, and serve.