The Liberal Democrats' Treasury spokesman in the House of Lords has stepped down after criticising the Government's deal with the banks.
Lord Oakeshott had given up the role "by mutual agreement", Lib Dem Chief Secretary to the Treasury Danny Alexander said.
He branded the Treasury's long-awaited deal with the banks on reducing bonuses and increasing lending, as "pitiful".
Chancellor George Osborne has been outlining details of an agreement which also included an increase in lending to small and medium sized businesses.
UK-based staff at Barclays, Lloyds Group, RBS and HSBC will see their bonuses lower this year than in 2010.
The salaries of the highest paid executives will be published.
The four banks, as well as Santander, have agreed to increase lending to businesses by £10 billion to £76 billion, with overall lending rising to £190 billion.
Banks will contribute £1.2 billion towards the regional economy, including £200 million to capitalise a new Big Society Bank.
Mr Osborne said he recognised the anger felt by many voters towards the banks, but it was time for Britain to move "from retribution to recovery".
Speaking outside the chamber, Business Secretary Vince Cable said: "Tougher mandatory disclosure rules covering the top eight executives outside of the board will give the UK the most transparent financial regime in the world, while linking executive pay to lending gives businesses a crucial assurance that bank executives have a stake in the real economy."
