LONDON (AP) — Tighter controls on bonuses, better-trained directors and greater shareholder involvement are among the sweeping changes proposed by a government-commissioned review of bank governance out yesterday.

The interim report from the so-called Walker review provided a damning assessment of the role of lax bank governance in the financial crisis, saying that weak bank boardrooms failed to challenge risky business models.

"It is clear that governance failures contributed materially to excessive risk-taking in the lead up to the financial crisis," said David Walker, the former financial services regulator who was appointed by the Treasury to head up the review. "Weaknesses in risk management, board quality and practice and control of remuneration need to be addressed," he added.

Britain's banking sector was hit hard by the global credit squeeze, with the government forced to step in and nationalise mortgage lenders Northern Rock and Bradford & Bingley. It also arranged the last-ditch rescue of bank HBOS via a tie-up with Lloyds, taking a stake in the merged bank while also picking up a majority holding in teetering Royal Bank of Scotland PLC.

Walker spoke with banks, institutional investors and experts in salary packages over five months to prepare the 142-page interim report. The Treasury will consult with industry on the recommendations before announcing its conclusions in November.