The move has provoked criticism from some financial advisers who say the honour is not deserved because of regulatory failures are the FSA.

However, in its citation the Cabinet Office describes Hector Sants as "an outstanding leader of the Financial Services Authority during the most challenging of times."

The full citation reads: "Hector Sants has been an outstanding leader of the Financial Services Authority during the most challenging of times. Following the failure of Northern Rock, he launched a fundamental transformation of the FSA's approach to prudential supervision and enforcement with a far more robust use of civil and criminal powers to achieve credible deterrence.

"He is also a former member of the Board of the Nuffield Orthopaedic Centre, Chair of the Board of the Said Business School, University of Oxford and a benefactor of a number of Oxford based charities including the Art Room, a charity providing art therapy to children with behavioural and learning difficulties."

Also honoured was Sir Alan Budd, a founding member of the Bank of England's Monetary Policy Committee.

Since helping to found the MPC he has chaired the Gambling Review Body and an independent panel on the impartiality of BBC coverage. The Cabinet Offices says that he came out of retirement to lead the new Office for Budget Responsibility and was integral to establishing its credibility at a critical time for the UK economy. He is a patron of Pro Bono Economics which helps to improve the effectiveness of the charitable sector.

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