‘We’re going to run out of money in the afternoon’: 10 years on, Alistair Darling remembers the onset of the great crash

Alistair Darling has defended the actions of the last Labour government at the height of the banking crisis and recounted the “scariest moment” when he was told that RBS was on the brink of collapse.

The former chancellor, now a peer, said the bold intervention of the Treasury and Gordon Brown had prevented “blind panic” around the world when they stepped in to save RBS and then later Lloyds/HBOS.

The bailout was briefly opposed by David Cameron and George Osborne before the inexperienced pair accepted there was little alternative.

Today Darling justified the nationalisation of the banks in an interview to mark the 10th anniversary of the onset of the credit crisis — seen as the moment when French bank BNP Paribas shut down several investment funds dependent on US assets.

“There would have been blind panic throughout the entire banking system, not just in the UK but around the world [if this country had not acted]”, Darling told the BBC.

He also described the moment when RBS director Tom McKillop contacted him to say the 300-year-old bank faced a run by its corporate customers in October 2008.

It was “probably the most scary moment” he said.

“I had to go to one of these meetings of European finance ministers, and I was asked to come out and take a call from the then chairman of RBS, who said the bank was haemorrhaging money.

“Remember this was not only the biggest in the world, it was about the same size as the entire UK economy.

“I said to him, how long can you last? And what he said to me shook me to the core. He said, ‘Well we’re going to run out of money in the early afternoon’.”

Darling emerged with huge credit among many commentators for his largely unflappable response to the financial crisis. His memoir lifted the lid on various tensions with Gordon Brown and he stepped down from the Commons in 2015.

Brown, who is also writing a memoir, has won praise for his decisive action in the crash, although he still faces criticism for the decisions taken in the decade he spent at the Treasury.