City of London Corporation policy and resources committee chairman Stuart Fraser told a fringe meeting at the Labour conference in Manchester that he had never seen anything like the current crisis in the 45 years he had worked in the City.
He said: “Only 1974 is in any way comparable. That took a relatively small co-ordinated action by the major investing institutions to turn the markets from disaster and move them into calmer waters.”
Fraser said this would not be possible in today’s globalised world and it fell to governments to take the necessary action.
He said using taxpayers’ money to bail out institutions was politically difficult but the consequences of taking no action would be more damaging.
Fraser said: “In my judgement, we were very close to systematic financial collapse which would have led not to an economic recession but to a depression.”