The House of Commons Public Accounts Committee noted lenders have been handed more than Â£1 trillion of government bailouts guarantees since 2008.
It claimed they are benefitting from an "implicit expectation" that they can always rely on taxpayer money to rescue them - but are currently reaping excessive profits and have put no new mechanisms in place to transfer such risk to bondholders and shareholders.
In a statement, chair of the panel Margaret Hodge said: "It is inappropriate for banks dependent on taxpayer support to be generating excessive incomes, unnecessary bonuses or dividends at the expense of exiting public support."
A recent report carried out by Ernst and Young on behalf of the Institute of International Finance suggested banks in the UK need to move away from a culture of risk and remove their excessive pay structures.
By Gary Cooper