UK lawmakers urge tougher sanctions on failed bankers

* Bank Commission MP Garnier calls for tougher action

* Garnier says bankers must be held 'personally accountable'

* PM Cameron says HBOS pensions an issue for individuals

* Bank Commission MPs to publish final report in May

By Matt Scuffham

LONDON, April 10 (Reuters) - British regulators must imposetougher sanctions on people who have run failed banks, makingthem personally responsible for their actions, members of theparliamentary commission which published a damning report intothe demise of HBOS told Reuters.

Former HBOS Chief Executive James Crosby on Tuesday offeredto give up his knighthood and nearly a third of his pensionafter being denounced by lawmakers for the "colossal failure"that led to his bank's collapse.

"What we can't do is allow this gesture to detract us awayfrom the core fundamental point which is that the regulator hasgot to be holding people personally accountable for theiractions," said Mark Garnier, a Conservative member of theParliamentary Commission on Banking Standards.

The Commission has asked Britain's financial regulator toconsider banning HBOS's former chief executives Crosby and AndyHornby and its former chairman, Dennis Stevenson, from workingin financial services.

"The key thing is that at this moment they can carry onworking within this industry. There's no personalaccountability. They took not just one but a whole series ofdisastrous decisions," said Garnier.

The Commission, tasked with finding ways to reform Britain'sbanks, is expected to make recommendations on how the regulatorshould be empowered to impose sanctions against individualsinvolved in wrongdoing at banks in the future when it publishesits final report in May.

"They need to be frightened of the regulator, whichcertainly wasn't true in the past, and that means thatpoliticians and the government have to back the regulator," saidanother commission member, who declined to be named.

RESIGNED

Crosby resigned from his role as an adviser to privateequity firm Bridgepoint following the report and stepped down assenior independent director at catering group Compass onTuesday. However, he remains chairman of Moneybarn, a small WestSussex company that lends to people with a bad credit history.

Martin Wheatley, who heads Britain's new Financial ConductAuthority, has said the culture within banks will only changewhen individuals are held to account by regulators.

Fred Goodwin, former head of Royal Bank of Scotland,the other large Scottish bank bailed out after the 2008financial crisis, had his knighthood removed last year and gaveup part of his pension in 2009.

Asked on Wednesday if other former HBOS executives shouldfollow Crosby's lead, a spokesman for David Cameron said thePrime Minister believed it was down to the individuals inquestion to decide but that Crosby had made the right decision.

The Commission, which includes former finance minister NigelLawson and the Archbishop of Canterbury, is expected to makerecommendations on whether banks should be able to claw backpast bonuses and pension awards in its final report.

Pressure is growing on other past HBOS executives to followthe 57-year-old Crosby's example after he offered to give up 30percent of his 580,000 pounds ($888,000) per year pension. Asnon-executive chairman of HBOS, Stevenson, 67, did not have apension but Hornby, 46 and now working as chief executive ofbetting shop chain Coral, is entitled to 240,000 pounds a yearfrom HBOS when he retires.

Peter Cummings, who was head of corporate lending at HBOSand was last year fined 500,000 pounds by the Financial ServicesAuthority for his role in the bank's downfall, is entitled to apension worth 369,000 a year.