Lord Myners says the banking system almost collapsed in October last year Banks and their "grossly over-rewarded" executives are partly to blame for causing the economic recession, a government minister has said. In an interview with the Times, City minister Lord Myners said the "golden days of huge bonuses" were over. Executives had "no sense of the broader society around them", he added. Lord Myners, the financial services secretary, said the bank system came close to collapse last October, before the government's £500bn rescue package. "There were two or three hours when things felt very bad, nervous and fragile," he said. I have met more masters of the universe than I would like to, people who were grossly over-rewarded

Lord Myners,

Financial Services Secretary "Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks." He said: "I have met more masters of the universe than I would like to, people who were grossly over-rewarded and did not recognise that. Some of that is pretty unpalatable. "They are people who have no sense of the broader society around them. There is quite a lot of annoyance and much of that is justified. "Let us be quite clear: there has been mismanagement of our banks." Knighthoods He also told the newspaper he could see no economic justification for the exponential rises in pay over the past 20 years. Bank executives should decide for themselves whether to pay back their bonuses or lose knighthoods, he added. FROM THE TODAY PROGRAMME Please turn on JavaScript. Media requires JavaScript to play.

More from Today programme This week, the UK officially went into recession after two consecutive quarters of negative economic growth - the widely accepted definition. Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter. It represents the biggest quarter-on-quarter decline since 1980, and a 1.8% fall on the same quarter a year ago.



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