Paulson: Fed assist in Bear Stearns right

WASHINGTON, March 17 (UPI) -- Market stability led to the Federal Reserve's $30 billion assist in the sale of troubled Bear Stearns, U.S. Treasury Secretary Henry Paulson said.

"Bear Stearns had a liquidity crisis and we felt it was very important to minimize its impact on our economy," Paulson said after his meeting Monday with U.S. President George Bush.

It also was important to resolve the matter before the Asian markets opened, he said.

J.P. Morgan's $2-a-share purchase of investment bank Bear Stearns over the weekend came with the aid of $30 billion in financing from the U.S. Federal Reserve.

When asked why the Fed's actions for Bear Stearns was more aggressive than actions taken for homeowners facing foreclosure, Paulson said, "I would say, if you would ask Bear Stearns shareholders in terms of what had happened to their value, I don't think any of them would think this is was good for them."

The price was $236 million, $28 a share less than the listing of Bear Stearns stock Friday on the New York Stock Exchange.

The importance of orderly markets and stability of financial institutions "made the decision an easy decision," Paulson said.