NEW YORK CITY-Even with 2008 long gone, the aftershocks of the last economic downturn are still reverberating through the streets of New York and London. “We are in the middle of a crisis,” said Peter Solomon, founder and chairman of the Peter J. Solomon Company LP at NYU’s Schack Institute of Real Estate’s “Keeping the Global City Competitive” London/New York Dialogue on Tuesday morning.

Solomon, a former investment banker with Lehman Brothers and former deputy mayor for economic policy under Mayor Edward I. Koch, spoke with Tony Travers, director of LSE London of the Greater London Group about the role of the two cities in the stabilization of the global economy during the "New York and London as World Financial Centers, Post Crisis and the Regulatory Environment" panel.

The news, however, was far from rosy. Solomon warned that further declines in the financial services sector are imminent due to its diminished role as an economic engine for New York City and the state. “The banking system is not strong,” Solomon said. “It is extraordinarily weak, undercapitalized and it is going to get worse until the bad loans are taken off the balance sheets.”