The second report on the banking crisis by the Treasury select committee also called for UK Financial Investments (UKFI), the body set up to look after taxpayer's stakes in part-nationalised banks, to stop being "so enigmatic".
The committee, chaired by the combative MP John McFall, urged the government to be clearer about the "impact on the public purse" of the asset protection scheme that is insuring more than £500bn of toxic assets at Lloyds Banking Group and Royal Bank of Scotland.
It expressed concern that some of the conditions attached to the government bailout - such as directors' pay and lending targets - may have discouraged some banks from applying for support.
But the report was criticised by both the Liberal Democrats and the banking industry. Vince Cable, LibDem Treasury spokesman, said: "This is a disappointingly weak report. It fails to meet the previous standards of tough criticism advanced by the select committee when interrogating the bankers."
Angela Knight, chief executive of the British Bankers' Association, said: "If we simply continue to blame the industry for all of the problems of the economy in the UK it will do little to help us out of the recession and will further damage the UK as an international financial centre."
The report, published after 17 sessions in which former bank executives gave evidence, concluded that the crisis was caused by low interest rates, apparent excess liquidity and a misplaced faith in financial innovation. Much of the blame was placed on the banks, but McFall also blamed governments, politicians, regulators and central bankers for "sustaining the illusion that banking growth and profitability would continue".
Copyright Speakers Corner 2017