HIGHLIGHTS 2-U.S. Treasury's Paulson on financial markets

WASHINGTON, Sept 15 (Reuters) - U.S. Treasury Secretary Henry Paulson briefed reporters on Monday at the White House on the current crisis involving major U.S. financial firms such as Lehman Brothers LEH.N and AIG (AIG.N).

Following are highlights from his comments:

"We're working through a difficult period in our financial markets right now as we work of some of the past excesses, but the American people can remain confident in the soundness and resilience of our financial system."

"There's got to be a balance between regulation and market discipline. You can't rely on one to solve the problem. But it's going to have to be streamlined and more effective regulation. And there's major changes that we need and we also need major authorities to wind down financial institutions that aren't banks, that aren't federal institutions with deposit insurance. We need resolutions and authorities to let us deal with situations like Lehman Brothers."

"We've got excesses we need to work through and we need to work through them as quickly as possible, and I think we're making progress."

"Our banking system is a safe and a sound one. And since the days when we've had federal deposit insurance in place, we haven't had a depositor who's got less than $100,000 in an account lose a penny. So the American people can be very, very confident of their accounts in our banking system."