Bank of England governor Andrew Bailey is being asked questions over whether a government agency he helped devise could have been linked to RBS’ improper practices against small business clients.

Between 2009 and 2013, RBS has been accused of widespread mistreatment of customers in its Global Restructuring Group, putting its own interest ahead of its clients by forcing small business clients into financial ruin to the bank’s own financial benefit.

Bailey worked with the Treasury to create the Asset Protection Agency, which had oversight of RBS’s controversial division.

The former FCA boss was at the head of the regulator when it was reviewing the role the scheme was playing.

However, the conflict remained unpublished in either FCA reports with Bailey’s sign off or in meetings with MPs, the Times reports.

The Asset Protection Agency contributed to pressure on RBS to pull the drawbridge up on business loans and reclaim assets, according to testimony in court from GRG’s former chief.

Derek Sach claims that to “flog” instead of back the business clients is what the Asset Protection Agency would have wanted.

The birth of the Asset Protection Scheme dates back to the financial crisis, where part of the government’s bailout loans of £282bn would be underwritten by the taxpayer to cushion the potential losses for banks like RBS.

As part of court action taken against GRG by small business clients, documents suggested that the Asset Protection Scheme needed to approve the decision before RBS could let customers exit their secured loans.

All party parliamentary group on fair business banking co-chairman Kevin Hollinrake told The Times.

“On Andrew Bailey’s watch, the FCA repeatedly avoided the opportunities to publish key evidence about the GRG scandal and failed to hold anyone to account.

“That Bailey failed to declare his interest and involvement in the agency when it featured in the FCA report as a potential cause of the scandal or to [MPs] when questioned about it is extremely disturbing.”