Virgin Money boss Jayne-Anne Gadhia has told MPs that sexism was “pervasive” in the “very male culture” of finance.
Ms Ghadia spoke of one example from her time at Royal Bank of Scotland when a senior woman was very upset because she was “expected to sleep with her boss”.
She was speaking to MPs as part of their inquiry into women in finance.
Ms Ghadia, who was at RBS from 2001 to 2007, added that the financial sector was now better at dealing with the inequality between men and women.
Parliament’s Treasury Committee is looking at the barriers for women in financial services and the value of greater gender balance.
It comes as the allegations against Hollywood producer Harvey Weinstein have shone a spotlight on sexual harassment in industries worldwide.
Women and men have been sharing their stories across social media using the hashtag “me too” to show the magnitude of the problem.
Ms Ghadia, who is a government champion for women in finance, told the Treasury Committee: “There was a very male culture and I’ve talked previously about part of that being the sort of win-lose culture.
“Undoubtedly there was a pervading sexism where I remember a very senior woman being very upset one day telling me that she was expected to sleep with her boss.
“That sort of thing of course means that there are issues for women in progressing through financial services.”
She also spoke of an experience from her own career, when she was rebuffed from a promotion in 1994 at the insurer Norwich Union, now Aviva.
“I was told by a very senior person at Norwich Union then, you have not got the characteristics necessary to lead a sales force,” she told MPs.
“And I said, what’s that? He said the two things you’re missing are a thick skin and a load of bull.”
RBS has been approached for comment.