The Public Accounts Committee noted that the Treasury had managed to cut the public purse's exposure to bank guarantee schemes in the wake of the credit crunch, and was doing better at holding on to key staff.
However, the Government was still facing a £34 billion loss on shares in RBS and Lloyds, and there were doubts as to whether the department had "sufficient capacity and skills" to respond to any future banking crisis.
Plans for more job cuts and high turnover of personnel threatened its "ability to effectively control the risks it is managing on behalf of the taxpayer".
More top news
Bomb disposal units have been sent to a site in Manchester and are responding to an incident.
Across the nation a minute's silence was observed at 11am to remember the victims of the Manchester Arena terror attack.
Long-term migration to the UK fell by 84,000 in 2016 compared to a year earlier, new statistics show.