Who's next in the Libor banking scandal?
Barclays has defended its actions by arguing that it only engaged in fixing of the inter-bank lending rate because virtually every other institution was taking the same dirty road not much of a defence, but an indication of how big this issue could get.
Of course, Barclays has an interest in deflecting the focus from itself, but it would have been impossible for the bank to have succeeded without at least the tacit support of its counterparts. There is no doubt that over the coming weeks and months more revelations will emerge, with investigators having looked into as many as 18 financial institutions already.
So which banks are set to be affected and which heads will roll as a result?
RBS is the most likely British institution to pay the price for its alleged involvement in the corruption. Tan Chi Min, a former head of delta trading for RBS's global banking and markets division in Singapore, has claimed that managers at the bank condoned collusion between its staff to set the Libor rate artificially high or low to boost profits.
He named five staff members he claims made requests for the Libor rate to be altered and three senior managers who he said knew what was going on. He said the practice started under Fred Goodwin.
However, Steven Hester took up his position at the head of the bank during the height of the banking crisis in 2008. This was around the time when it appears Libor fixing became more prevalent at British banks. With pressure piling on from the fallout from the computer glitches that caused massive problems for customers, Hester won't be feeling at all comfortable in his position.
RBS is taking an aggressive stance and is fighting a court order requiring it to co-operate with the criminal investigation that would mean it had to reveal confidential internal documents that could show that traders fixed the rate. Whether this will insulate the bank or just make the fallout all the more catastrophic remains to be seen.
Analysts at broker Liberum Capital have warned that Lloyds Banking Group could have to pay out more than £1 billion over claims that it was involved in the fixing.
The broker said investors are misguided in thinking that the smaller size of Lloyds' derivatives division (less than a tenth the size of Barclays) means that the bank will be protected from the worst ravages of the regulators.
Documents released by the US Federal Reserve appear to show that Lloyds was rigging its Libor submissions as early as 2007. A whistleblower at the lender sent the central bank details of how the inter-bank rate was reported lower than it was in reality and suggested: "Draw your own conclusions about why people are going for unrealistically low Libors."
Lloyds Boss Antonio Horta-Osorio only joined the bank in 2011, so will probably escape the majority of the ire that could be directed at other CEOs unless revelations emerge about very recent practices. He refused his bonus earlier this year and has generally been praised for his moves to bring the bank back towards simple banking.
Chairman Sir Winfried Bischoff might not be sitting so pretty. He was appointed in 2009 and could take the fall if Lloyds is castigated.
It looks as if HSBC will be officially dragged into the Libor investigation after it was revealed that its traders were involved in a ring of bankers from lenders such as Credit Agricole, Societe General and Deutsche Bank, who have exchanged emails with Philippe Moryoussef, the former Barclays trader who is implicated in the scandal.
Didier Sandler is said to be one of the traders at HSBC to have been involved in the exchanges. Head of group compliance David Bagley has already quit after the US Senate found there was a "perversely polluted culture" that allowed money laundering to go on. CEO Stuart Gulliver may be vulnerable if HSBC is dragged into the scandal. He has been with the bank since 1980 and was head of investment banking until he became CEO in 2011.
At least 12 banks have so far fired or suspended employees in relation to Libor fixing. Two traders who were suspended by Lloyds back in March returned to the firm in late June. RBS is understood to have sacked four traders for involvement in the manipulation at the end of last year.
As well as having to face the regulators, the threat of being hit with prosecutions is becoming more and more likely as the pressure increases. The US Department of Justice is said to be on the brink of making arrests relating to the fixing and has apparently contacted HSBC, RBS and Lloyds to inform them of their intentions. On this side of the Atlantic, the Serious Fraud Office (SFO) launched its probe into Libor fixing earlier this month, with the very real threat of charges being brought against individuals involved in the manipulation.
Jerry Del Missier, former Barclays chief Bob Diamond's right-hand man, and the one who was revealed in email exchanges to have ordered the setting of the Libor rate at an artificially low level, may well be their main target, but others from different banks look set to fall with him.
Although few are likely to dip their toes into the murky waters of Libor fixing again any time soon, those who do will face more serious sanction.
The European Commission has proposed making interest-rate fixing a criminal offence alongside offences such as insider trading.
Investors should be wary of the impact of any action taken against the banks involved. The most likely to be hit have refused to say whether they have put aside any cash to cover any fines that might have to be paid. Barclays had done so in anticipation of having to pay out a big whack, but it only accounted for about a third of what they eventually had to shell out.
No matter what, big fines, public shame and the toppling of those at the helm would inevitably send shares in any bank the way of Barclays.
This article was written for our sister website Interactive Investor
The London Inter-Bank Offer Rate is the rate at which banks lend to each other over the short term from overnight to five years. The LIBOR market enables banks to cover temporary shortages of capital by borrowing from banks with surpluses and vice versa and reduces the need for each bank to hold large quantities of liquid assets (cash), enabling it to release funds for more profitable lending. LIBOR rates are used to determine interest rates on many types of loan and credit products such as credit cards, adjustable rate mortgages and business loans.