Media playback is unsupported on your device Media caption FSA chairman, Adair Turner: "The public are justifiably angry"

The law should be tightened to tackle misbehaviour in banking, says the head of the Financial Services Authority.

Adair Turner told the BBC's Andrew Marr programme there should be a presumption a director of a failed bank should not work in the industry again.

Lord Turner said the FSA's fine was its strongest available sanction.

Business Secretary Vince Cable is also considering criminal sanctions for bank directors.

Mr Cable said those in charge of failed banks should face prosecution, a view echoed by Lord Turner.

The business secretary said the government would launch a consultation on criminal sanctions for the directors of failed banks later this week.

Lord Turner said: ""The situation on the law is that we have looked very carefully at what types of cases we are able to bring, and in this particular case of Libor, because it is not a qualifying instrument under the Act, it is not covered by the criminal law.

"We have therefore brought the maximum cases we can bring under our own powers."

He added: "We should consider a change in the law about the liability of directors...if you are the director of a bank that's failed, it's not a matter of bad practice but simply causing problems for the whole economy, whether there should be a presumption that you should not be allowed back into the industry again."

Not confident

A survey by the consumer group Which? found popular support among those canvassed for a toughening of the law on malpractice among bankers.

In making false submissions about their borrowing costs, managers at Barclays believed they were operating under an instruction from Paul Tucker, deputy governor of the Bank of England

It found more than three-quarters of people (78%) who responded think individuals should be personally prosecuted when banks break the law.

It also showed two-thirds (66%) were not confident the government would act in their best interests when introducing banking reforms.

Mr Cable believes greater involvement by shareholders would also help to rein-in wrongdoing by banks.

Writing in the Observer after Barclays was fined for trying to rig the Libor inter-bank lending rate, Mr Cable condemns the "incompetence, corruption and greed... endemic in British banking".

Libor (London Inter Bank Offered Rate) is the rate at which banks in London lend money to each other.

Mr Cable said shareholders "must get a stronger grip" to prevent corruption in banks.

Traders sacked

The BBC's business editor Robert Peston said RBS sacked less than a dozen traders at the end of last year when evidence emerged that they had tried to manipulate Libor rates.

He said he understood they were dismissed as soon as emails were discovered showing they had tried to rig Libor for the benefit of their derivatives deals.

Our correspondent said he understood it would be three months before RBS reached a settlement with the FSA and other authorities over its role in the scandal.

The amount of fine and penalties it would have to pay had not yet been agreed, he added.

Lord Turner said the FSA had been in talks with the Serious Fraud Office (SFO) and if there had been fraud the latter could bring a case against those implicated.

Ministers have announced an independent review of the Libor workings, which will be established next week and report by the end of summer.

Labour, the TUC and some Tory backbenchers want to go further with a public inquiry on banking, something that has been dismissed by the Treasury and the Bank of England.

Barclays boss Bob Diamond has been summoned to appear before the Treasury Select Committee on Wednesday and chairman, Marcus Agius, will also be questioned about the Libor scandal.

Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: AAA-rating AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule.

'A joke'

The bank was fined £290m ($450m) but Mr Cable said: "The public cannot understand how a corporate fine - which will be passed on to customers and shareholders - begins to address the problem.

He suggests four steps for sorting out the banking "mess":

Making banks safe so there is no further risk of collapse and rewarding "sensible banking" rather than "hoarding" and "speculative trading"

Carrying out the Vickers reforms , which are designed to segregate retail and business banking

Shareholders taking more responsibility

Changing the culture of the sector and encouraging the introduction of new business models

On the role of shareholders, he added: "No-one at the top of Barclays will take responsibility for systemic abuse."

"Shareholders, the owners, have a major responsibility here. I am bringing in legislation to strengthen their control over pay and bonuses, through binding votes, but shareholders have to get a stronger grip on weak boards and out-of-control executives."

Shadow business secretary Chuka Umunna questioned the independence of the the body that represents the banks.

"We've got the absurd situation where the current chair of the British Bankers' Association (BBA), Marcus Agius, is also chair of Barclays," he told the BBC.

"He was chair of Barclays at the time that Barclays was providing erroneous information and lying to the BBA. And yet he is still in place as chair of the BBA. Now to most people this begins to make the BBA like a joke."

On Friday, the Financial Services Authority revealed separately that Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group had agreed to pay compensation to customers who were mis-sold interest-rate hedging products.