“We are committed to retaining the reputation and integrity of BBA Libor, which continues to be the authoritative benchmark of the wholesale money market,” said a spokesman for the British Bankers’ Association, according to the Financial Times. 

That there should even be a question about the  London interbank offered rate's -- Libor’s -- integrity is problematic. As the Financial Times explains, Libor is used as a reference rate for about $350,000bn in financial products.

Regulators in the US, Japan and UK are investigating whether some of the biggest banks conspired to “manipulate” this benchmark interest rate. The investigation centres on the panel of 16 banks that help the British Bankers’ Association set  Libor – the estimated cost of borrowing for banks between each other.

The probe came to light on Tuesday when the Swiss bank UBS (NYSE:UBS) disclosed in its annual report that it had received subpoenas from three US agencies and an information demand from the Japanese Financial Supervisory Agency. The other banks on the panel are: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, Rabobank, Royal Bank of Canada, Bank of Tokyo-Mitsubishi, Norinchukin Bank, Royal Bank of Scotland and West LB.

As to the Libor calculation algorithm, “…it is fully transparent – all of the data inputted by the contributor banks is publicly available, as is our methodology,” said the BBA.