The Liberal Democrat peer said Mr Hornby should “show a sense of honour” and step down from his role as chief executive of gaming and leisure giant Gala Coral, ahead of its rumoured stock market flotation.

In April, the Parliamentary Commission on Banking Standards, of which Baroness Kramer is a member, released a 92-page report on the collapse of HBoS, which, Mr Hornby said, was party to a “catastrophic failure of management, governance and regulatory oversight”.

Baroness Kramer said: “To see those who made so many mistakes in the financial crisis heading up listed businesses will infuriate the public.

“The commission is now working on legislation that could see heads of failed banks face a potential prison sentence. Those in charge should recognise they are very lucky.”

Mark Garnier, MP for Wyre Forest, who sits on both the commission and Treasury select committee, said: “The new legislation should serve as a ‘nuclear deterrent’, which means senior executives should run their businesses differently in future.”

A spokesman for Gala Coral declined to comment on the rumours of a flotation or of the future for Mr Hornby’s position at the firm.

The FCA is expected to publish a report into the collapse of HBoS later this year.

ADVISER VIEW

Kim Barrett, director of Hertfordshire-based Barretts Financial Solutions said: “How someone who fails at one institution and then walks into another high-paid job puzzles me.”