@Maddus Mattus: There is no regulation currently in place for LIBOR. Those who identified the abuse were working beyond their regular duties, they were not, and there were no watchdogs in place whatsoever.
If we don't try to regulate this, it is foolishness. Regulations are not inherently bad for our economy, in fact, they are very very good. Otherwise banks stop trusting themselves and all trades have booby-traps hidden within them. We should re-establish the law seperating banking from trading stocks.
Please stop the robotic knee-jerk reply for a second and think about the reality of this situation. This is not a football game to cheer one side or the other. Principles at all cost is neurotic denial, imho. Understand what is being discussed!
To try to state the case that LIBOR is unnecessary approaches full-blown denial of the reality of international banking. LIBOR isn't a trick, it is a cog in the global financial system. Bankers created it in order to establish trade with each other. To say LIBOR should be prohibited shows a lack of understanding of how banking works. If you seriously believe that the massive amounts of trading can support setting an interest rate as part of each transaction independently of all other transactions you will be laughed out of the room. There will be a number set and used and it will be a consensus from the banks themselves, regardless. Denial of the physics here is not possible.
Humans do strive to do the right thing, I disagree with you here too. I am an optimist.