Paulson confident of GSE backstop deal this week

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Monday he was "quite confident" Congress would approve a backstop plan this week for Fannie Mae (FNM.N) and Freddie Mac (FRE.N) that would allay market concerns about the housing finance giants.

"I'm quite confident that we will get the sort of program we need this week to deal with this situation," Paulson told CNBC television in an interview.

"Let me say that I've been gratified by the support in Congress," Paulson added.

Paulson's plan would provide the two government-sponsored enterprises with unlimited government loans and equity capital to bolster investor confidence in the two institutions that he views as a key to the recovery of the U.S. housing market and the economy overall.

The backstop is being considered as part of a broader housing rescue bill that also would create a stronger regulator for the GSEs.

Paulson said Fannie and Freddie were critical to U.S. markets confidence, and most of the recent concerns were centered on Fannie's and Freddie's access to adequate capital.

"The easiest way I know of to address those concerns are to say these organizations are essential, that we understand this, we understand how important they are to the capital markets and to our economy, and we're there if necessary, to make that capital available," Paulson said.

He also said actions to boost confidence in the U.S. capital markets and the economy would help support the dollar.

"You know how I feel about a strong dollar, and I believe the most important thing we can do support a strong dollar is to have confidence in our capital markets, confidence in our economy, taking the kinds of actions we're taking."

(Reporting by David Lawder; Editing by Leslie Adler)