The secretary of the Treasury, Henry Paulson, defending the bailout of Bear Stearns Cos., said policy makers will do whatever is needed to prevent disruptions in financial markets from hurting the economy.

“The government is prepared to do what it takes to maintain the stability of our financial system,” Mr. Paulson told the “Fox News Sunday” television program in Washington yesterday. “Our focus, our no. 1 priority, is the stability of our financial system.”

Mr. Paulson, 61, spoke two days after the Federal Reserve rescued Bear Stearns, the fifth-largest American securities firm, with an emergency loan. The move failed to avert a crisis of confidence among Bear Stearns customers and shareholders, who drove the stock down a record 47%.

In three appearances yesterday, the former chairman of Goldman Sachs Group Inc. several times said the Fed made “the right decision” and expressed “great confidence” in its chairman, Ben Bernanke. Mr. Paulson said that in the case of Bear Stearns, the risk to financial stability outweighed his concern about so-called moral hazard, in which investors come to expect government rescues.

“I’m as aware as anyone is of moral hazard,” he said in a CNN interview. “I’m also aware of the importance of keeping our economy strong, of orderly capital markets, of the stability of the financial system doing things that promote orderliness and minimize the disruption.”

Mr. Paulson said “conversations are going on over the weekend” about Bear Stearns. “I’m very involved in those conversations.” He declined to be specific about the future of the 85-year-old firm, the second-biggest underwriter of American mortgage bonds, or to say whether any additional government steps are planned.

“There’s always a decision to be made to say what’s best for the stability of the marketplace, the orderliness of the marketplace,” Mr. Paulson said. “I think we made the right decision.”

The Treasury chief refused to say what a growing number of economists have concluded — that the economy has entered a recession. “Economists are going to be debating that for months and months,” he said. “It’s much less important what you call it than what you’re doing about it.” The Standard & Poor’s 500 Index is down 12.3% this year, while the dollar is down 5% against a basket of currencies of major American trading partners. Home foreclosures in January and February were up 58% from the first two months of 2007.

“I’ve got great confidence in our financial markets and our financial institutions,” Mr. Paulson said. “Our markets are resilient, are flexible. Our institutions — our banks and investment banks — are strong.”

Mr. Paulson repeated his support for a “strong dollar,” and said the long-term strength of the U.S. economy would be reflected in the country’s currency.

President Bush is scheduled to meet today with his Working Group on Financial Markets. Mr. Paulson chairs the group, which includes Mr. Bernanke and the chairman of the Securities and Exchange Commission, Christopher Cox.

The Bush administration has resisted the use of government funds or guarantees to stem the surge in foreclosures.

Mr. Paulson has brokered a series of voluntary accords among lenders to freeze interest rates on subprime loans and negotiated a one-month moratorium on foreclosures.

A credit crisis that began in August has left markets “more fragile than we would like right now,” Mr. Paulson said in a separate interview on ABC News’s “This Week” program. “My concern is to minimize the impact on the broader economy.”

Mr. Paulson said the administration doesn’t support measures in Congress to help struggling homeowners.

The chairman of the House Financial Services Committee, Barney Frank, and the chairman Senate Banking Committee, Christopher Dodd, offered a plan last week to let the Federal Housing Administration insure refinanced mortgages after lenders reduce principal to help struggling borrowers.