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Treasury Secretary Henry Paulson testifies before a Senate Banking, Housing and Urban Affairs Committee hearing titled "Recent Market Developments and Regulatory Responses to Them" on Capitol Hill in Washington on July 15, 2008. (UPI Photo/Roger L. Wollenberg)

WASHINGTON, July 20 (UPI) -- U.S. Treasury Secretary Henry Paulson Sunday said the economic slowdown will "go on for a while" but the economy is fundamentally sound.

Appearing on CBS' "Face the Nation," Paulson said what he called "the housing correction" was at the heart of the overall slowdown. He said the other major issues are turmoil in capital markets and high oil prices, which he said will prolong the slowdown.

"It's going to go on for a while and we're going to be in a period of slow growth for a while," he said.

However, Paulson said the U.S. economy has "very strong long-term fundamentals."

"I think it's going to be months that we're working our way through this period," he said. "This is a very manageable situation."

Paulson said the U.S. banking system is "safe and sound," noting that there have been five bank failures this year, compared with more than 80 during the S&L crisis of the late 1980's and early '90s. However, he acknowledged the list of troubled banks will likely grow.

"Of course the list is going to grow longer given the stresses we have in the marketplace, given the housing correction, but again, it's a safe banking system," he said.