U.S. Treasury Secretary Henry Paulson says that market stability is job one at this point.

In a statement released Sunday, Paulson said he strongly supported the actions announced by US Securities and Exchange Commission chairman, Chris Cox, to ensure that the operating broker dealer, and other subsidiaries, of failed investment bank Lehman Brothers Holdings Inc. can continue to operate as the firm goes through bankruptcy proceedings.

He also lauded Federal Reserve chairman Ben Bernanke’s move to boost liquidity by expanding the collateral it will accept, among other actions, designed to ensure market liquidity; and the effort of 10 large banks to adopt their own measures to bolster liquidity.

“These changes will strengthen and enhance our financial markets,” he said. “These initiatives will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets.”

“Today we are looking forward. This weekend’s discussions made clear that both market participants and regulators in this country and abroad recognize the need to support market stability and remove uncertainty as they address current challenges,” Paulson added. “I am committed to working with regulators and policymakers — including Congress — to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets. And I will engage with regulators and policymakers around the world to that end.”

“I am confident in the resilience of our capital markets, and in the commitment of U.S. regulators and market participants to work together through this difficult period,” he concluded.

IE