From what we know so far, it is easy to speculate that the Libor base rate was manipulated by at least 0.02 percent, though probably not often more than 0.12 percent, over a period of at least five years. These might seem like small numbers, a small fraction of a percent. If you are thinking of something like a home mortgage, such an interest rate discrepancy could amount to a $1 per month difference in interest charges — enough to care about, but hardly enough to get excited about.
But Libor and other base rates are bigger than any one loan or transaction. They are important because of the trillions of dollars in instruments that are valued and interest payments that are computed from base rates. When the amounts of money are larger than most national economies, it doesn’t take a very large slice to add up to something huge. If a bank intentionally falsified its reports to manipulate Libor or another base rate, and then benefited financially from that action, it might very well owe refunds that total billions of dollars. And if banks got together to take control of Libor using false data, it is easy to imagine that they might collectively be liable for the consequences. With billions of dollars at stake, the legal investigations that sprang up in several countries and states last week aren’t likely to fade away quietly.