When properly spelled, LIBOR stands for the London Interbank Offered Rate and it is the benchmark against which much consumer related debt is priced.

Since LIBOR is a measure of the average interest rate at which large London banks make short-term loans to one another, the calculation depends on self reporting by each of these institutions.  Fudging those numbers has serious consequences.

If LIBOR goes down, the interest rate on your credit card, student loan or even home mortgage might go down with it.  If LIBOR goes up, those rates would follow.  This makes the accuracy of LIBOR a big deal for borrowers around the world.

It is also a big deal for hedge funds, bond traders and other financial wizards whose gains and losses can be impacted substantially by even minute changes in LIBOR.

Together these financial forces combine to make cheating on LIBOR a considerable political and regulatory problem. Not to mention yet another trust shattering event for everyone.

A flurry of Barclay’s executives has resigned or been fired because of accusations that the bank falsely reported data used to calculate LIBOR over a considerable period of time.  Parliamentary hearings are underway and  the scandal could easily eclipse the Murdoch news empire phone hacking debacle.

Those who favor deregulation — but more importantly those who would like their industries to be deregulated — would do well to remember that breaching the public trust does not help their cause.

Elected officials are not immune.  Though the scandal occurred while a Labour government was in power, the Conservatives, who now lead the British government in partnership with the Liberal Democrats, are generally viewed to be the supporters of banking interests.

Tar brushes are also out for the Bank of England and the Financial Services Authority.

Remember Lehman Brothers? Barclay’s bought the shrapnel after it crashed. Maybe it bought the culture too?