The credit crunch will last for up to two more years, the boss of Britain's Barclays Bank believes. John Varley forecast that consumers and businesses would struggle to access credit for between one and two more years. He added that banks should apologise to customers to regain their trust.
Mr Varley told BBC1's Panorama that the banking industry was facing a "public relations crisis" and would not regain the trust of the public until it had said sorry for what went wrong. He told the program: "If you look at the industry as a whole, if I speak as a member of the industry rather than as chief executive of Barclays, I absolutely have to say we should share our portion of responsibility." A reduction in the overall quantity of debt in the economy was imperative, he said. He added that he did not expect banks to start to increase their lending again before 2010. But the key to economic recovery lay in asset prices, he argued. "As soon as asset prices stabilise, then we will see the financial economy recover. And when will that occur? That will occur some time over the course of the next 18 months," he said.