WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson appeared on a handful of the national public-affairs programs Sunday to try and shore up confidence in the U.S. financial system in the wake of the dramatic government-engineered rescue of Bear Stearns Cos.
"I've got great confidence in our financial market, our financial institutions. Our markets are resilient and flexible. Our institutions, our investment banks are strong," Paulson said in an interview on Fox News Sunday, the first of three scheduled interviews.
Later, in an interview on ABC's This Week program, Paulson said the financial system was more fragile than he would like.
But he quickly added: "I am convinced they [our financial institutions] are going to come out of this situation very strong."
Paulson said he supported the bailout of Bear Stearns
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, put together by the Federal Reserve with the technical assistance of J.P. Morgan Chase & Co.
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and announced early Friday.
Bear Stearns was forced to accept an extraordinary bailout package after being deserted by the clients and counterparties at the heart of the 85-year-old Wall Street firm's business.
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Paulson also stressed the White House stands "prepared to do what it takes to maintain the stability of our financial system."
"That is our top priority," he said.
Paulson said that the administration's been "all over" the economic downturn and that the economic-stimulus package recently signed into law by President Bush was a sign of proactive White House leadership.
The refund checks will be mailed starting in early May, Paulson noted, adding that this "is going to make a meaningful difference."
Paulson bristled at suggestions the Bush administration had not done enough to forestall the sharp economic slowdown that stemmed from a historic downturn in the nation's housing market.
"Can we outlaw the forces of gravity? How much can the government do?" he asked.
Paulson also repeated that a strong dollar was in the U.S. national interest.
Asked why he didn't take a more aggressive stance, Paulson replied: "We are ... advocating very strongly policies that are going to increase confidence in the U.S. economy."
The dollar hit new lows against the euro and the Swiss franc after the market digested news of the Bear Stearns bailout.
See Currency coverage.
Standing firm
Paulson defended the White House's opposition to several proposals germinating in Congress.
See related story.
These include plans to purchase boarded-up homes by cities and states in the hopes of stabilizing neighborhoods hit by subprime foreclosures, changes in the bankruptcy code to allow mortgages to be discharged in bankruptcy, and extending federal loan guarantees to more homes once lenders have accepted their losses.
"All of the ones [proposals] which I have seen which call for more government intervention ... do more harm than good," Paulson said.
troubled economy, cautioning that "one of the worst things you can do is overcorrect."
President Bush planned to meet Monday with his advisory panel on financial markets, which includes Paulson as well as Fed Chairman Ben Bernanke.
Paulson also repeated his full support for the alliance of private lenders and nonprofit organizations that was put together by Treasury. Called Hope Now, the program is designed to streamlining the process for refinancing, modifying mortgages for distressed homeowners and offering a 30-day delay for some on the brink of foreclosure.
"We are making real progress. There have been over a million homeowners that have been helped by workouts through the administration's proposal since July," Paulson said.
But there's a nagging concern on the part of many analysts that the program might not be much more than a band-aid, especially since home prices continue to decline.
In a speech last week, Bernanke said that the mortgage and banking industries should consider more "vigorous" actions to stem the tide of foreclosures, including reducing the size of many mortgage loans to reflect the lower value of the home.
Paulson noted that 92% of American homeowners continue to make their mortgage payments on time. Foreclosures account for roughly 2% of the total mortgage population, he said.
"We have programs that are aimed at those homeowners that want to stay in their homes," Paulson said.
Greg Robb is a senior reporter for MarketWatch in Washington.