It's not too late to "pull the plug" and dump the banks, he added.
His comments came as bailed-out British lender Lloyds Banking Group unveiled management changes. The company said that its insurance and retail heads are stepping down. Lloyds is 41 percent owned by the UK government.
"When the bonuses come out, the general public feels slightly irritated," Nightingale said with a hint of understatement, on news that Royal Bank of Scotland, another state-backed bank, unveiled that its chief executive Stephen Hester will receive a 2010 pay package of £7.75 million ($12.5 million). The package will include £4.45 million in shares.
If a recession materializes, it could be especially severe on the back of rate hikes from central banks in emerging markets, as well as the European Central Bank expected hike in April, Nightingale said.
"Secularly high levels of personal debt and secularly low levels of personal sentiment" will also continue to weigh on growth prospects, he added.
Nightingale went on to say that governments' "whistling" about a broadening and deepening recovery is just "to keep up their spirits," and that they "know they've got it wrong. But they're unwilling to admit it."
Countries that are looking the least troubled include the US, Germany and Japan, in Nightingale's opinion. But he singled out Britain as the country that has made more mistakes than others.