HIGHLIGHTS: Bernanke, Paulson, Cox respond to Senate questions

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and U.S. Securities and Exchange Commission Chairman Christopher Cox discussed their recent actions to shore up support for Fannie Mae and Freddie Mac before the Senate Banking Committee on Tuesday.

Following are highlights from the question and answer portion of their appearance before lawmakers, including some comments from key legislators:

COX ON SYSTEMIC RISK OF CURRENT GSE MODEL:

"I would hope that in addition to what we're doing right now -- which is in extremis -- we keep in mind the end state that we're trying to achieve and we would quickly learn the lessons of the moment, which include the fact that the systemic risk that has been located here in part because of the perception of government embrace of them, that that would no longer be the case in the future. I think the combination of socialized risk and privatized profit is a very suspect model."

PAULSON ON WHETHER TREASURY AND FED SHOULD BE CO-GSE

REGULATORS:

"I don't see a role for Treasury in the consultative regulatory process. We'd have a strong independent regulator. And then the Fed would have a consultative role, as we are suggesting, more broadly across the whole economy."

BERNANKE ON WHETHER FED SHOULD SUPERSEDE OFHEO:

"No. The most valuable thing would be for us to be in a consulting, discussion, information-exchange type of relationship."

SENATE BANKING COMMITTEE CHAIRMAN CHRIS DODD ON PROPOSED GSE

OVERSIGHT ROLE FOR FED:

"The bill that's pending now in resolution between the house and the senate ... establishes a very strong regulator for the GSEs.

There are those, I'm included here, that would be concerned about in a sense substituting that very strong regulator, and I say this respectfully, to the Chairman of the Federal Reserve."

DODD ON COMBINING MORE AUTORITY UNDER THE FED:

"I'm uneasy about what we're trying to achieve here. I'm not sure I'm want to get to a Financial Services Administration model that Great Britain has."

PAULSON ON IMPORTANCE OF GSES AND THEIR SECURITIES: