"The chief executive of one global bank who declined to be named told Financial Mail: ‘Your working hypothesis should be that every bank in the industry did some version of this same thing. There will be more to come.’
Admitting that his own bank would almost certainly face a fine, he said: ‘We simply do not know at this stage how big it will end up being.’
Another banking source said of the Libor debacle: ‘In our office we’ve been talking about whether this is possibly as bad as 2008.’
While Barclays was the biggest-falling bank share in the world last week, others took a battering. RBS fell 11 per cent, knocking £1.7 billion off its value.
It has admitted that some of its traders tried to manipulate Libor and is locked in a legal battle with a Singapore dealer it sacked for the offence. He has alleged that trying to rig Libor was common practice at the bank. RBS is contesting the case."
"The source said: ‘This tendency for banks to then quote lower rates gave an illusion of stability and was a key factor in masking the severity of the crisis.’
He argued that at first Barclays resisted this trend.
‘Our money market traders were very aware of the issue and made considerable and I think honourable attempts to fight against this tide by submitting higher than average rates they felt were more representative of an extremely dysfunctional market. As a result, for several months Barclays submissions to Libor were higher than the rest of the pack,’ the source said. But while this was borne out by the Financial Services Authority, the regulators concluded that Barclays managers did eventually instruct juniors to provide false quotes."
"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, I have learned.
This belief was fostered after a telephone conversation in the autumn of 2008 between Mr Tucker and Bob Diamond, who at the time ran Barclays' investment bank, Barclays Capital, and is today chief executive of Barclays.
Mr Tucker did not issue this instruction. But he and Mr Diamond have different recollections of their conversation. So what Mr Diamond recalls about this telephone conversation may turn out to be the most explosive and important part of his testimony to MPs on the Treasury Select Committee, which will take place on Wednesday."