George Osborne insisted Stephen Hester made the decision to quit as head of Royal Bank of Scotland (RBS) following claims that he effectively forced him out.
The Chancellor said the banking chief executive "decided to go" but added that his "consent and approval" was sought.
Mr Hester quit last week but made clear he had wanted to see the bank through to privatisation and had "mixed feelings" about leaving.
Mr Osborne also confirmed he will set out the next steps for state-backed banks RBS and Lloyds banking group on Wednesday in his annual Mansion House speech.
© 2013 Press Association