The banking industry has never been held in the highest esteem but this summer its reputation plunged to new depths. The Libor rigging scandal rocked the City in June and revealed a depth of corruption to the outside world that was previously unknown.

Barclays was fined £290m worth of global fines and lost its legendary chief executive Bob Diamond and chairman Marcus Agius in the process. Perhaps the most surprising element is that many in the City who knew the scandal was coming believed Libor was a technical issue that would not attract much attention. How wrong they were.

Barclays was subject to Treasury select committee hearings and chancellor George Osborne ordered the Parliamentary Commission on Banking Standards to advise on how to create a more ethical culture in financial services.

The summer of 2012 saw business attitudes to banking hit new lows. With state bailouts for the failures of 2008 followed by four years of chronically low business lending, opinions were already at rock bottom.

There have also been a number of high profile misselling scandals involving interest rate swaps, payment protection insurance, pensions and endowments. The perception is that that banks are out to help themselves and not fund the growth of businesses in the way they should.

While such business anger is clear there has to be solutions. The parliamentary commission will report on 18 December and feed into the Government’s banking reform bill next year.

For Libor rigging Financial Services Authority (FSA) chief executive Martin Wheatley undertook a rapid but comprehensive overhaul of Libor. The Government has adopted the recommendations in full. Wheatley sought to correct some of the most shocking gaps in regulation and criminal sanctions with a number of clear-headed solutions.

Firstly, the British bankers Association, the banker trade body, was responsible for collecting Libor data and publishing a daily rate. Clearly this cosy practice had to end and Wheatley put control firmly in the hands of the Financial Conduct Authority (FCA), the new financial services regulator.

One of the problems with the Libor rigging aftermath was the constant buck-passing between Government, Bank of England and FSA over who was responsible. Now we know.

Secondly, rather than estimates submitted to the BBA, as was the practice, the FCA will be able to demand actual rates of inter-bank lending. In reality there are thousands of inter-bank loans every day and it is near impossible to police so regulator’s will rely on estimates.

But trust has been undermined and samples of actual data will be used alongside published submissions. And finally, the most shocking failure of the regulatory regime was the total inability to bring any prosecutions because of the failure in criminal law.

To any normal person rigging rates would appear to be fraud and Wheatley had corrected this gap in the law by suggesting criminal sanctions for rate rigging.

The Wheatley Review should leave anyone who relies on Libor for business loans, mortgages or derivatives feeling more confident about the future. It has the confidence of the Government and should help to restore the broken trust in a system that is a benchmark for $800 trillion of securities worldwide.

Wheatley is superb at fixing the Libor market but it does not correct the future problems in banking. In his report Wheatley warned there could be other rate manipulation scandals lurking in the gas markets and anything else that uses global wholesale benchmarks.

In the last month traders have made allegations that other traders deliberately manipulated rates to buy cheaper gas on the wholesale markets. There is no suggestion, as yet, that consumers are affected.

Wheatley’s rules could be used a template to tackle any more problems but they may need some adjustment. Besides, with seven global banks still under investigation for Libor rigging including HSBC and the Royal Bank of Scotland this scandal has a long way to run yet.

Samuel Dale is politics reporter at financial newspaper, Money Marketing

The Wheatley Review, Libor Scandal Still Unresolved
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