Timeline: Libor-fixing scandal
So, when Barclays was fined £290m back in June after some of its derivatives traders were found to have attempted to rig this key rate, already weak public confidence in banks was harmed further.
The scandal forced both Barclays chief executive Bob Diamond and chairman Marcus Agius to resignation.
With the Financial Services Authority (FSA), the UK financial watchdog, due to publish its final report on reform of the Libor rating-setting system on Friday, 28 September, here are some of the key dates in the scandal:
As early as 2005 there was evidence Barclays had tried to manipulate dollar Libor and Euribor (the eurozone's equivalent of Libor) rates at the request of its derivatives traders and other banks.
Misconduct was widespread, involving staff in New York, London and Tokyo as well as external traders.
Between January 2005 and June 2009, Barclays derivatives traders made a total of 257 requests to fix Libor and Euribor rates, according to a report by the FSA.
One Barclays trader told a trader from another bank in relation to three-month dollar Libor: "duuuude... what's up with ur guys 34.5 3m fix... tell him to get it up!".
Senior treasury managers instructed submitters to reduce Libor to avoid negative publicity, saying Barclays should not "stick its head above the parapet", according to the FSA report.
From as early as 28 August, the New York Fed said it had received mass-distribution emails that suggested that Libor submissions were being set unrealistically low by the banks.
On 28 November, a senior submitter at Barclays wrote in an internal email that "Libors are not reflecting the true cost of money", according to the FSA.
In December, a Barclays compliance officer contacted the UK banking lobby group British Bankers' Association (BBA) and the FSA and described "problematic actions" by other banks, saying they appeared to be understating their Libor submissions, according to US regulator the Commodity Futures Trading Commission (CFTC).
On 6 December, a Barclays compliance officer contacted the FSA, according to the FSA report, to express concern about the Libor rates being submitted by other banks, but did not inform the FSA that its own submissions were incorrect, instead saying that they were "within a reasonable range".
The FSA said that the same compliance officer then told Barclays senior management that he told the FSA "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience", and that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances".
In early December, the CFTC said that the Barclays employee responsible for submitting the bank's dollar Libor rates contacted it to complain that Barclays was not setting "honest" rates.
The employee emailed his supervisor about his concerns, saying: "My worry is that we (both Barclays and the contributor banle panel) are being seen to be contributing patently false rates.
"We are therefore being dishonest by definition and are at risk of damaging our reputation in the market and with the regulators. Can we discuss urgently please?"
On 6 December a Barclays compliance officer contacted the FSA about concerns over the levels that other banks were setting their US Libor rate. This was made after a submitter flagged to compliance his concern about mis-reporting the rate. Compliance informed the FSA that "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience".
He also reported that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances, so I suggest we maintain status quo for now".
In a phone call on 17 December a Barclays employee told the New York Fed that the Libor rate was being fixed at a level that was unrealistically low.
To continue reading this extraordinary outstanding report click: