U.S. Treasury Secretary Henry Paulson is discussing an agreement with banks to curtail a rise in foreclosures by fixing interest rates on loans to subprime borrowers, according to people familiar with a meeting he led yesterday, Bloomberg reported.

Paulson presided over a gathering at the Treasury Department in Washington with federal regulators, bankers and lobbyists. Citigroup Inc., Wells Fargo & Co. and Washington Mutual Inc. executives attended, said a person present, who spoke on condition of anonymity.

As the housing recession continues, the Bush administration cut its forecast for economic growth in 2008 yesterday to 2.7 percent, down from June projection of 3.1 percent. The Commerce Department reported yesterday that the median price of a new house declined 13 percent in October from a year earlier. Fewer homes were sold than economists anticipated.

Stocks climbed today on speculation Paulson’s efforts may help slow credit losses. They also gained after Federal Reserve Chairman Ben S. Bernanke said “renewed turbulence’ in financial markets may hurt growth, reinforcing investors’ expectations for an interest-rate cut next month. The Standard & Poor’s 500 stock index has risen 1 percent to 1,484.59 as of 9:29 a.m.