The appointment of former banker Sir Win Bischoff to lead Britain's accounting and corporate governance watchdog was described as "the City looking after City insiders" at a hearing of the Treasury Select Committee yesterday.
Sir Win, a former executive and investment banker with America's Citigroup and then chairman of Lloyds Banking Group, was appearing before the committee in the wake of his appointment as chairman of the Financial Reporting Council. The FRC regulates auditors and oversees Britain's Combined Code on Corporate Governance.
Committee member John Mann said Sir Win was "an odd choice" for the FRC given his work for Citigroup in the run up to its near collapse. He described this as "one of the biggest disasters, one of the most heavily criticised" institutions and also said Lloyds had been "found guilty of various improprieties" during Sir Win's time as chairman of the state-backed bank.
Sir Win said he had not been responsible for his appointment and had not been at the top of Citigroup during its difficulties in the run-up to the financial crisis and its subsequent bail out by the US Government.
He also defended his time at Lloyds, saying that the taxpayer was "getting back his money at a profit".
"Performance under the management team I put together has been very good," Sir Win added.
But Mr Mann was not satisfied by the explanations: "You're one of the insiders' insiders. You were in the middle of it. Vast numbers of people lost their jobs and yet you emerge responsible for overseeing corporate governance. How can that be right?"
He later said: "This industry [banking] has been a disaster in terms of its behaviour.
"Hasn't the country had enough of the City looking after City insiders? Your employment exemplifies what is wrong with the culture."
Sir Win insisted that the FRC had a board made up of a variety of people and that he would not be responsible for making all the decisions.
The FRC is currently run by chief executive Stephen Haddrill, a former civil servant turned trade association boss. He has previously served as chief executive of the Association of British Insurers.