Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), made the remarks to the Commons Treasury Select Committee a day after HSBC was engulfed in claims that it helped clients dodge millions of pounds in taxes.

Mr Wheatley was confronted over the list of misconduct issues affecting the sector in recent years, which have also included Libor and FOREIGN EXCHANGE rate rigging, money laundering and payment protection insurance mis-selling.

He told MPs: "I think it's quite clear that the number of scandals that we've seen in financial services, particularly in banks, has been staggering, and the latest allegations I think are equally scandalous."

Mr Wheatley said he had not known about the specific latest claims about HSBC until they emerged in recent days, though the wider issue of its alleged misconduct had already been made public following leaks in 2007.

The FCA had already been working with the bank to improve its procedures relating to money laundering, he said.

HSBC was fined 1.9 billion dollars (£1.2 billion) in the US in 2012 after allowing itself to be used by drug cartels and rogue states to launder cash.

Mr Wheatley said: "We are very closely monitoring the ability of the bank overall to improve the situation and we think improvements have been made."

He said the FCA had not been handed details of the latest HSBC scandal by HM Revenue and Customs (HMRC).

"I am not aware of a direct channel of information on this particular case," said Mr Wheatley, adding that he did not know whether HMRC had any obligation to do so.

The hearing was also taken up with concerns about a scheme to compensate firms mis-sold complex financial products known as interest rate swaps.

Latest figures showed nearly £1.8 billion has been paid out to those affected but Tory MP Mark Garnier voiced fears that many had been denied "natural justice".

Concerns centre on the issue of claims for "consequential losses" incurred as a result of the mis-selling being given up by firms in order to speed up the process of receiving direct compensation.

Mr Garnier suggested that the FCA had succumbed to pressure to agree to a scheme which dealt with these claims in a way "loaded in favour of the banks".

Committee chairman Andrew Tyrie said the swaps mis-selling affair had resulted in "bankruptcy and ruin for a number of people".

Some would feel that because of the way claims were dealt with, they had been "ripped off by the banks once ... and for a second time under the noses of the FCA", he suggested.

Mr Wheatley said: "I am very well aware that not everybody is happy with the outcome they have achieved and those that haven't we have worked extremely hard with to try to make sure that the outcomes are fair and reasonable outcomes."

Pressed further by MPs about the "regular drip, drip, drip" of banks' misdemeanours, Mr Wheatley insisted that the string of scandals coming to the surface shows that the FCA has a grip on the problems and that banks are being held to account.

But he said he could not be confident that the regulator has seen all the skeletons in banks' cupboards.

Mr Wheatley said: "I would share the view that, from the public's point of view, this drip, drip, drip, as you call it, of bad stories from the banks shakes confidence in the financial system, absolutely.

"The majority of what are coming out as new stories are historic, so relate to a period of 2005 to 2008. Some are more recent than that, the majority go back some way, and my hope is that there will be less of a succession of stories coming out as time goes on."

Asked if he was aware of other stories to come out, Mr Wheatley said: "I don't know that I'm aware of any on the scale of some of the bigger stories, but we have within our organisation a number of investigations that are ongoing, which eventually will find their way into the public domain, which will raise further questions about the banks.

"I think the fact that these stories are coming out shows the opposite of what you say, that we haven't got a grip on it, we have got a grip on it, and that's why banks are being held to account for the actions that they've taken."

Asked when the drip of scandals will stop, Mr Wheatley said: "I hope it will diminish over time."

He was asked whether the FCA has told the chief executives of the major banks to get all of their skeletons out of the cupboard now.

Mr Wheatley replied: "Yes. And we encourage the banks, and they have an obligation to come to us ... and talk to us about skeletons early on. And we do have that conversation with the banks."

But asked if he was confident that the FCA is at least peeking at banks' skeletons that are not fully out of the cupboard, Mr Wheatley replied: "No, I'm not.

"Because, frankly, the CEOs don't know about these skeletons in their organizations."

Asked about how pay and bonuses have changed in the City compared with 2008, Mr Wheatley said: "We haven't done a City survey, but clearly as part of our round of discussions with the banks we talk to them about what the profile has been and what has happened.

"Anecdotally, it's gone from a situation in, say, 2008 when a bonus at a senior level would be four or five times base (salary), to something now where it's one times base. But, equally, base has gone up by at least 100%."