Crosby, who was chief executive of HBOS shortly before the government had to pump in £20.5bn to prevent its collapse in 2008, said he was "deeply sorry" for his role in HBOS's failure and asked for his knighthood, awarded in 2006, to be removed.
"Although I stood down as chief executive of HBOS in 2006, some three years before it was taken over by Lloyds, I have never sought to disassociate myself from what has happened," he said in a statement yesterday.
"Shortly after I left HBOS, I received the enormous honour of a knighthood in recognition of my own – and many other people's –contribution to the creation of a company which was then widely regarded as a great success.
"In view of what has happened subsequently to HBOS, I believe that it is right that I should now ask the appropriate authorities to take the necessary steps for its removal."
Crosby said he would also give up 30% of his £580,000-a-year pension after last week's report into the bank's collapse.
The damning report by the parliamentary commission on banking standards, published last week, found a division of HBOS guilty of "very serious misconduct" in the way it was managed in the run-up to its taxpayer bailout and rescue by Lloyds Banking Group.
The Bank of Scotland division of HBOS only escaped a "very substantial penalty" because the taxpayer would have had to foot the bill. It is understood that the fine would have easily surpassed the £17.5m penalty slapped on Goldman Sachs for systems failures.
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