The minister for the city Lord Myners has criticised banks for their poor management of their own operations and warned of “fundamental changes” in the way they operate.

In an interview with the Times, the former Marks and Spencer chairman said senior executives at banks had no concern for society around them, adding that the days of huge bonuses being paid by city firms was gone.

While criticising the management of 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,” he added.

Lord Myners also spoke about how close the banking system came to collapse on October 10th amid fears that financial institutions could fall like dominos.

He said; “How close were we to a systemic collapse of the banking system? We were very close on Friday, October 10th. There were two or three hours when things felt very bad, nervous and fragile.

“Major depositors were trying to withdraw — and willing to pay penalties for early withdrawal — from a number of large banks. The steadying influence of what we did should not be underestimated.”

The minister for the city did not rule out nationalising the banking system, stressing that independent banks would be the best providers of credit in the economy.

He also emphasised that the government was not bailing out the banking system but was acting to address the “reckless caution” in lending shown by banks that was harming business across the UK.

“We are not bailing out the bankers. What we have done is to ensure the banks are there to support the economy. There are going to have to be some fundamental changes in the way the banks operate … the golden days of huge bonuses in the investment banking arms are gone,” he told the newspaper.