Paulson's priority to shore up banks

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke signaled that their priority is shoring up the nation's banks even if it means they don't get taxpayers the cheapest prices for the devalued assets the government buys.

Bernanke told lawmakers yesterday the government won't pay "fire-sale prices" for the mainly mortgage-related securities Paulson aims to buy in a proposed $700 billion rescue. Instead, officials want to set a long-term value on assets, intending to hold them until they mature or markets improve.

Insisting on paying higher prices may increase complaints from legislators, who will pepper Bernanke and Paulson with questions in a second day of hearings yesterday, that the government is bailing out Wall Street at the expense of Main Street. At the same time, setting values too low may roil financial markets further and tip the economy into a deep recession.