Libor scandal: Where's the outrage?

Libor. How many people gave it a passing thought before this scandal? In fact, I'm surprised that more people are still not giving it much thought.

The scandal, after all, is another sign of banks doing what they want, making a lot of money and not really getting in all that much trouble (yet, anyway).

To review: The London Interbank Offered Rate is the basis for many consumer loans and investments. It is determined by the rate that 18 banks say they have to pay to borrow money.

It turns out, these banks may not have been on the up and up, submitting artificial rates that would benefit their trading operations [insert shocked expression here].

Barclays (BCS) got fined a piddly $450 million for admitting it submitted artificially low rates and CEO Bob Diamond was forced to resign. Of course, the bank claims it was only following the leader, so to speak.

Although frankly, having learned how LIBOR was set, I'm surprised there's ever a time when it WASN'T fiddled with. (It's self-estimated!)—
Columbina (@EccentricFlower) July 09, 2012

A scant $450 million fine and executive resignations is hardly punishing. Consider that Barclays alone had $2.4 trillion worth of assets on its books at the end of 2011.

Barclays bankers and traders regularly misreported numbers, according to its settlements. That's part of the problem with an unregulated market. The temptation to manipulate gets stronger after the first time goes unnoticed. The British Bankers' Association, which publishes the rates, is a trade association so it's essentially powerless when it comes to regulating Libor.

Barclays can take heart in this. It's not the only bank under the gun. Deutsche Bank (DB), Royal Bank of Scotland (RBS), Credit Suisse (CS), Citigroup (C), UBS (UBS)and JPMorgan Chase (JPM) say they're all being investigated.

Related: Lawsuits against banks loom

Meanwhile, there's no shortage of finger pointing going on.

Bank of England's Deputy Governor Paul Tucker was testifying in the House of Commons in London Monday.

@ChrisGiles_ Tucker was not focused on the financial crisis until oct 2008 when he fell over it. This really is feeble. I was there...—
Danny Blanchflower (@D_Blanchflower) July 09, 2012

By the time the dust settles, there are bound to be more lawsuits filed, fines to pay, executives to fall from grace. But how severe the punishments will be remains to be seen. Will any of the banks under investigation really suffer? Will regulators be forced to find an alternative to Libor, which, let's be real, has only been around since 1984? And will anyone go to jail?

I'm heart sick over all this public corruption and feel frustrated at my lack of agency to do anything about it. huffingtonpost.com/mobileweb/robe…—
Sarah Beth Hopton (@sbhopton) July 09, 2012

It's still too early to tell the final outcome but I think the outrage will grow as more and more comes to light. And I can only hope that regulators will find a way to manage the fallout without completely shaking investor and consumer confidence.