"There are no free lunches, and shoddy wholesale practice is not a victimless act, even in those cases where it is not defined as a crime," Turner told the watchdog's last annual meeting.

The FSA was criticised for not bringing criminal charges against Barclays or its traders who rigged the London Interbank Offered Rate (Libor) and is expected to be given new powers.

"We will therefore need to think carefully how far we should shift our past approach to the supervision of wholesale conduct, and what resources and skills we need to be more effective in this area," Turner said.

The FSA will publish the outcome of its review in the autumn. Turner said the Libor scandal is a huge blow to the reputation of the banking industry.

"The cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits - has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis," Turner said.

Barclays chief executive Bob Diamond resigned on Tuesday and the watchdog also faces questions on its role and effectiveness when the rigging took place.

The FSA is being scrapped next year and replaced with two new supervisory bodies a prudential regulator at the Bank of England and a standalone Financial Conduct Authority. Turner said the cutover to the two new bodies is expected in April 2013.