The Libor Scandal and Capitalism's Moral Decay

Last month, the British bank Barclays agreed to pay $453 million to American and British authorities to settle allegations that it manipulated key interest rates for profit between 2005 and 2009, specifically the London Interbank Offered Rate, or Libor. 

American and British investigators are now examining whether traders at a dozen other banks -- including the "too-big-to-fail" U.S. banks JPMorgan, Citibank and Bank of America -- also manipulated rates.

It is hard to overstate the impact of the Libor benchmark, which is used to value some $360 trillion in loans and financial contracts worldwide. It affects lending to governments, businesses and consumers, and even student loan and credit card rates.

So Barclays' victims weren't just other banks and traders. They included taxpayers in dozens of communities who are believed to have paid millions more in interest than they should have at the height of the financial crisis. Teachers and other public servants may have been laid off because of bankers' pursuit of ever-higher profits.

 Banks are denying any wrongdoing, and the true scope of the losses -- and the role of American banks -- is expected to emerge in the complex legal battles ahead.