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London's competitiveness as a financial centre has taken "a hammering" following the failure of Northern Rock, according to Tim Linacre, chief executive of Panmure Gordon.
He told the Financial Times that London as a brand had been damaged but predicted that the wounds will heal.
"I don't think it is terminal, but London needs to be absolutely on its toes," he said.
The collapse of Northern Rock was the most high profile casualty of the credit crunch in the UK, following the failing of Bear Stearns in the US.
A rescue package was put together by the government to help the bank. The Guardian has reported that the nationalisation could cost UK taxpayers up to £1.28 billion.
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