Even if you’re tired of reading about Wall Street greed and financial fraud, you may want wake up to read about the latest scandal to hit the global banking industry.  Barclays Chairman Marcus Agius, Chief Executive Officer Bob Diamond and several other top executives have resigned following revelations the company manipulated interest rate data.  Barclays was hit with a massive £290 million fine and their reputation is under daily assault in the press.  A report by analysts at Keefe, Bruyette & Woods claims that banks may end up paying $35 billion in civil damages.  “This dwarfs by orders of magnitude any financial scams in the history of markets,” said Andrew Lo, a professor of finance at the Massachusetts Institute of Technology.

Most people outside of the banking industry have never heard of LIBOR until now, yet it affects each and every person paying interest on a line of credit. LIBOR stands for the London Interbank Offered Rate and it serves as a reference point for the cost of lending for the financial products that we all use, such as car loans, adjustable-rate mortgages, student loans and credit cards.

LIBOR is calculated by determining the daily average (via a poll of participating financial institutions) of how much interest a bank is willing to pay if they wanted to borrow money from another bank. LIBOR gives financial analysts the ability to gauge financial health; if a bank is feeling confident in the system, they’ll give a low number, and conversely, if they are uncertain about the financial outlook that day, they will report a higher number.

Barclays, based in the United Kingdom, allegedly attempted to manipulate LIBOR back in 2008, when many countries faced a crippling financial crisis. Evidence points to underreporting the cost of borrowing to bolster its trading positions and present a misleading image of financial strength.

Barclays contends that they are not the only financial institution involved in the scandal; in fact, 16 banks are currently being investigated for the same reason, including U.S.-based Bank of America Corp., Citigroup Inc., and J.P. Morgan Chase & Co.

These accusations are just the latest in a long line of issues coming out of the financial system. Corporate executives, board members and even regulators are coming under increasing scrutiny for a lack of oversight and systemic failures of internal compliance controls.

It is satisfying to see some accountability in the financial arena, but is it enough to repair their reputation?  As more news of the LIBOR scandal comes to light, financial institutions will need to be a model of openness and transparency if they want to regain the trust and confidence of consumers.