Michael Bloomberg: Our response to the financial crisis should be modelled on 9/11

We are facing the worst confidence crisis in our lifetime. It's going to affect anyone who wants to borrow money to buy a car or a house or expand their business or take out a student loan.

There is no sugar-coating this – it's bad. There is no use pointing fingers, but if we are going to avoid these situations in the future, we have to understand how we ended up here. The world has changed – and if we are going to avoid these meltdowns in the future, we have to adapt. And not just the private sector, but government too.

That doesn't mean we need more regulation, necessarily, just smarter regulation. Here in the UK, the regulatory structure is more streamlined, but your system and ours in New York share an underlying weakness: a lack of transparency. We simply don't know the value of the assets that financial institutions are holding. Greater transparency will help restore confidence and trust – which is exactly what the market needs to break that cycle and prevent it from happening again.

In America, we have heard a lot of comparisons to the Great Depression. The better analogy to make – at least in terms of how we should be thinking about our next steps – might be to a terrible crisis that is far more recent: The attacks of 11 September 2001. And let me explain why.

In the weeks and months after the attacks, we worked hard to improve our understanding of the threat. The answers we arrived at made it clear we needed to take some major steps – some of which may sound familiar.

First, we needed to improve the transparency of flow of information – so that government agencies do not miss important signs and developments. We needed to invest more money to shore up our underlying vulnerabilities and promote public confidence. And we needed to work more closely with our allies abroad to share information and strategies.

Today, these essential steps apply to economic security, too – and if we have learned anything from the post-9/11 years, it is that cities cannot wait for national governments to take action. In New York, financial services account for only 10 per cent of our workforce, but 35 per cent of all wages. When Wall Street catches a cold, the rest of the city sneezes. That is not going to change anytime soon, but it is our job to prevent that sneeze from becoming pneumonia.

Taken from a speech by Michael Bloomberg, the Mayor of New York, to the City of London last night

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