Britain needs a \"radical\" overhaul of its scandal-hit banks, with reckless bankers facing jail and bonuses deferred for up to ten years, a government commission set up after the Libor scandal proposed in a final report on Wednesday. The Parliamentary Commission on Banking Standards, which is mostly composed of lawmakers, concluded that senior bankers must be made personally responsible for malpractice -- with a new criminal offence of reckless misconduct that carries a prison sentence. The Commission\'s report, entitled \'Changing banking for good\', outlined the \"radical reform\" which it argued was required to improve standards. The reputation of Britain\'s banking sector has been damaged in recent years by a string of scandals, including Libor rate-rigging, credit insurance mis-selling, and controversy over staff behaviour and bonuses in the run-up to the 2008 global financial crisis. \"Recent scandals, not least the fixing of the Libor rate that prompted parliament to establish this Commission, have exposed shocking and widespread malpractice,\" said Commission chairman and Conservative lawmaker Andrew Tyrie. \"Taxpayers and customers have lost out. The economy has suffered. The reputation of the financial sector has been gravely damaged. Trust in banking has fallen to a new low. \"Prudential and conduct failings have many shared causes but there is no single solution that can restore trust in the industry. The final report contains a package of recommendations that, together, change banking for good.\" The Commission called for bankers to be licensed and sign up to a new code of conduct. Under the code, all key responsibilities within a bank would be assigned to specific senior officials who would be held accountable. The Commission also proposed that more remuneration should be deferred for longer periods of up to ten years, in order to \"reflect the longer run balance between business risks and rewards\". Regulators would be granted new powers to cancel all outstanding deferred remuneration -- and would \"rigorously\" enforce the reforms. \"Under our recommendations, senior bankers who seriously damage their banks or put taxpayers\' money at risk can expect to be fined, banned from the industry, or, in the worst cases, go to jail. That has not been the case up to now,\" added Tyrie. The findings were published before a key speech from Finance Minister George Osborne, who was expected later Wednesday to outline his bank reform plans. A spokesperson for Treasury welcomed the report, adding that it would help \"create a stronger and safer banking system\". In addition, the report recommended that the government consider splitting the state-rescued Royal Bank of Scotland into a good bank and a bad bank, in order to unwind toxic assets. The Commission was formed last year after revelations that Barclays bank tried to manipulate the Libor rate, which is used as a benchmark for global financial contracts worth about $300 trillion. Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.Last week, industry body the British Bankers\' Association announced changes to Libor interest-rate transparency in a bid to avoid a repeat of the affair.