Britain risks another financial crisis unless it undertakes fundamental reform of the banking sector, the governor of the Bank of England has warned.

Mervyn King said “imbalances” in the banking system remained unresolved and were “beginning to grow again”.

He criticised high street banks for routinely exploiting their customers and urged them to take a longer-term approach to their business rather than simply trying to “maximise profits next week”.

“We allowed a [banking] system to build up which contained the seeds of its own destruction,” King has told the Daily Telegraph.

“We’ve not yet solved the ‘too big to fail’ or, as I prefer to call it, the ‘too important to fail’ problem. The concept of being too important to fail should have no place in a market economy.

“The problem is still there. The search for yield goes on. Imbalances are beginning to grow again.”

King’s comments are a warning to the chancellor, George Osborne, as a government commission considers whether to force high street banks to sell off their investment banking arms.

Osborne is thought to be against such a plan but King is due to become ultimately responsible for banking regulation.

His remarks come weeks after Osborne signed Project Merlin under which it was agreed that in return for banks lending more money and showing restraint on bonuses, the government would not take any more action on pay and profits.

King criticised the culture of short-term profits and bonuses in the banking system, suggesting that traditional manufacturing industries had a more “moral” way of operating.

“They care deeply about their workforce, about their customers and, above all, are proud of their products,” he said.

“[With the banks] there isn’t that sense of longer-term relationships. There’s a different attitude towards customers. Small and medium firms really notice this: they miss the people they know.

“If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, that is perfectly acceptable [to the banks].”

The governor argued that good businesses “keep a clear vision of who their customers are and are run by people who don’t think they should simply maximise profits next week”.

But he stood by previous comments that appeared to endorse the coalition government’s strategy for reducing the deficit. Responding to a warning against becoming too political, made by the shadow chancellor, Ed Balls, King said: “It is inconceivable that the governor has no view on the size of the deficit and the need to reduce it.

“It would be a dereliction of duty for me not to warn. You need a credible plan to reduce it, over the lifetime of a parliament. But it is for ministers, not for me, to say how this should be done.”

Asked about the likelihood of an interest rate rise, potentially as early as next week, King said there was a “perfectly reasonable case for doing it now”.

But he added that increasing rates too soon would be a “futile gesture”.

Angela Knight, chief executive of the British Bankers’ Association, disagreed with King’s comments.

“The banking industry recognises that some of its number got it badly wrong during the crisis. Since then the industry has reformed radically,” she said.

“We work closely with our customers and in doing so have created one of the largest financial centres in the world and a great contributor to the British economy. We achieved this together by doing our business well – not by doing it badly.

“This is a responsible industry which believes in working with its customers of all shapes and types.”