Libor scandal: Who might have lost?
The Barclays Libor scandal has caused such a furore that it has led to the resignation of the bank's chief executive.
But can we be sure that anyone has actually lost any money as a result of being overcharged by Barclays?
Libor is the the inter-bank lending rate set every day by the British Bankers' Association (BBA).
Libor sets the price for trillions of pounds of hugely valuable derivatives deals in the City - complex trades designed to, for example, insure banks against risk or allow them to make a bet on the future value of assets.
But it is also the benchmark for pricing some UK residential mortgages, more commonly for commercial mortgages, and increasingly for pricing commercial loans by banks to UK businesses.
So, any successful manipulation of Libor would have affected more than just a few money brokers in the City.
The FSA report , published on Wednesday, does not say that the Barclays staff involved ever actually managed, in their persistent attempts, to manipulate the daily calculation of Libor.
But a statement of facts published by the US Department of Justice goes further in suggesting "the manipulation of the submissions affected the fixed rate on some occasions".
Before he resigned, Mr Diamond admitted that this may indeed have been the case.
In a letter to staff , he said: "On the majority of days, no requests [to manipulate the Libor calculations] were made at all."
"Even when made, the requests were not always accepted by the submitter, and the attempted adjustments were, on average, small - typically less than one basis point.
"When the ultimate rate was affected is a complex question, especially given the role of the other banks' submissions."
While any successful rigging of the Libor rate would have benefited swaps traders, or at least minimised their losses, it would have been to the detriment of other groups such as certain US retirement funds, mortgage and loan corporations and insurance companies, the report said.
The extent to which this has affected individuals will not be known for some time, certainly not before other investigations into alleged Libor manipulation come to a conclusion.
Ray Boulger, at mortgage brokers John Charcol, estimated that in the past 10 years, at any one time only about 250,000 UK residential mortgages would have had a home loan linked to the Libor rate, rather than the Bank of England's base rate.
"That is about 2% of the mortgage market and they would have been taken mainly by buy-to-let borrowers and sub-prime borrowers," he said.
Before the financial crisis in 2007 and 2008, Libor would have been, on average, about 0.15 percentage points above the Bank of England's base rate (also known as bank rate), Mr Boulger said.
"[However] Libor is a forward indicator of where bank rate is going, so at times it might have been below bank rate, and at other times above it," he said.
Mark Harris, chief executive of mortgage broker SPF Private Clients, explained that most mortgages track a lender's standard variable rate, or the base rate, so most are not directly affected by Libor.
"The only mortgages which track Libor and are therefore directly affected by its pricing are those available via the private banks, commercial loans and mortgages from one or two specialist lenders, such as Paragon," he said.
"However, indirectly it does affect borrowers. When banks increase their spreads, they cite the reason as Libor; the cost of their own borrowing is more expensive so they have to pass this cost onto customers."
In a letter to Andrew Tyrie , the chairman of the Commons' Treasury Committee, Mr Diamond said that - the manipulation at Barclays tended to be of rates that did not affect mortgages directly.
"The interventions in question were typically on the short term [Libor] and three month rates relevant to the wholesale markets and not the longer term rates used to set, for example, retail mortgages," he wrote, before his resignation.
Lower, not higher
A key point here is that the attempts of Barclays' staff to rig Libor were not always upwards.
At times individual traders wanted Libor to be pushed lower, to suit their own deals. Mr Diamond said this might not have benefited Barclays as a whole.
At the height of the financial crisis a few years ago, senior staff at Barclays wanted to see Libor pushed lower too, to disguise the evidence that the bank was having a difficult time borrowing money from other banks.
So who would have been the losers?
They might be investors who lent money to the bank by buying its short-term bonds, with a Libor-linked interest rate.
In this case they might have been paid less interest than they should have been.
According to the Association of Corporate Treasurers, the vast majority of interest rate derivatives involve financial companies, such as banks, investment firms, insurers and hedge funds.
Neil MacKinnon, a City economist at VTB Capital, said: "Libor itself has already lost credibility as a benchmark - the banks do not lend to each other at all at the moment."
"But the banks may be open to litigation if they are sued by their customers for being ripped off."