A review of the 1976 sterling crisis shows clear parallels with the trading environment facing the pound today, UBS has claimed.Speaking to the Financial Times, Mansoor Mohi-uddin, managing director of foreign exchange strategy at the bank, explained that the crisis followed on from precipitous exchange rate falls in 1974-75 akin to the nosedive witnessed late last year.By the end of 2008, the pound was trading at parity at many high street foreign currency exchanges, while the greenback had made substantial inroads against sterling after the British currency breached the $2 barrier in 2007.Mr Mohi-uddin explained that the 1976 crash was the result of injudicious fiscal tightening in the midst of economic recovery, which resulted in an exodus from the pound as investors became unwilling to shoulder public and current account deficits."If a hung parliament in 2010 or high unemployment paralyses fiscal policy, sterling will face major risks again. Even without an outright crisis, the conduct of economic policy will remain challenging over the next 12 months," said the UBS managing director.