The former Prime Minister's admission came as Boris Johnson, the mayor of London, called for a greater emphasis on growth and appeared to contradict David Cameron's warning that the eurozone crisis could last up to eight years.
Blair told the Murnaghan programme on Sky News: "In respect of the economy, yes, of course, everybody who was in power in the period bears a certain responsibility.
"On the other hand I think what happened – and this is really important for people to understand – this global financial crisis was the product of a whole new way that the financial and banking sector has been working in this past 20 or 30 years, where you have got this deep integration of the global economy and where you have a lot of financial instruments that were created whose impact people didn't properly understand," he said.
Asked if that meant Labour did not fully understand it while he was in power, he replied: "No, we didn't."
In an apparent warning to the current party leader, Ed Miliband, who wants Britain's banks dramatically reined-in, he said: "A vibrant financial sector is also a very important part of our future. Take the necessary steps, but realise that thriving and healthy banking sector is a major part of the modern British economy and will also be so."
Meanwhile, Johnson urged greater investment in the economy and the encouragement of large capital projects to get the economy moving.
"I am worried that people are losing confidence and losing enthusiasm," he told the BBC's Andrew Marr Show. "We need a more aggressive plan for more infrastructure."
He added: "There in danger of overdoing the gloom. I don't think that this will go on for another eight years."
Johnson also warned against an "orgy of stable door-banging and excessive regulation" for the financial services sector and claimed there were many international competitors that would be "only too happy to knock London off its perch".
"My message to Americans who may be slagging off London: the sub-prime crisis, frankly, began in the United States, not here," he said.
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