The British Parliamentary Commission on Banking, set up after the Libor interest rate-rigging scandal erupted last year, said on Wednesday that senior bankers found guilty of reckless misconduct should be jailed.

“A lack of personal responsibility has been commonplace throughout the industry. Senior figures have continued to shelter behind an accountability firewall. Risks and rewards in banking have been out of kilter. Given the misalignment of incentives, it should be no surprise that deep lapses in banking standards have been commonplace,” Committee Chairman Andrew Tyrie, a Conservative MP said in the report.

In the wake of what it calls shocking and widespread malpractice in the banking system, the highly anticipated report attacked what it called a “misalignment of incentives,” where the system is rigged in a way where banking executives are rewarded for cheating the system – as some were found to be doing by colluding to manipulate the important daily London Interbank Offered Rate, or Libor, which dictates how much it costs to borrow money.

On Tuesday, Thomas Hayes, 33, a former Citibank and UBS trader became the first banker to be formally charged by British authorities with a crime for his alleged role in the Libor-manipulation case. Similar rate-manipulation scandals have broken out in Singapore and Hong Kong.

Among the report’s recommendations:

- Senior banking officials should be legally bound to their responsibilities in a way where reckless disregard could lead to criminal charges and even jail time;
- Bonuses should be deferred for up to 10 years, aligning them with long-term performance of senior executives;
- All deferred pay and pensions should be canceled when banker misconduct is discovered and senior bank officials should lose all such compensation and benefits if their bank has to take taxpayer money to be rescued from its own actions; and
- Short-term gains to appease shareholders should no longer be a bank’s primary incentive, ahead of sound longer-term financial practices.

Read the entire report here.