That would be a decade "where the economy is highly unstable, or, worst case, we actually have another down period - a so-called W-recession".
However, Mr Hester called it the "democratic dilemma" that "human beings find it extremely hard to deny themselves today in favour of a safer and calmer future".
"So it is entirely possible that we actually enjoy a rather faster recovery, where people are tempted to say: 'That was a bad nightmare behind us, but don't worry it's gone and we can go back to where we were before.'
"I think that might happen. If it does happen it will be dangerous because we won't have fixed the problems that have recently exploded in our face and until we fix them the world is an unstable place and our economy is unstable."
The RBS boss also told our correspondent that his parents, who are academics, believed that "bankers get paid too much".
The full interview with Stephen Hester can be seen on Leading Questions with Robert Peston, at 2030 and 2330 BST on Saturday, 12 September, and 2230 on Sunday, 13 September, on the BBC News Channel.
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