US prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to Reuters.

Citing people familiar with a "sweeping investigation" into the rigging scandal, the report suggests that employees of Barclays, Citigroup, Credit Agricole, HSBC and Deutsche Bank are the focus of indictments. The focus of prosecutors will be on a "small group of traders" from the various banks and not, it seems, high-level bank executives in Europe or the US who may have known about or condoned such practices.

Some observers wonder if the targeting of low-level traders will allow for the systemic manipulation of Libor by big banking institutions to escape the necessary scrutiny.

The libor rate helps set the price for trillions of dollars in financial products including student loans, mortgages, and derivatives.

Firedoglake's David Dayen laments the possibility that "individual traders will get arrested for their role in rigging Libor," but the "sustained rigging" by some of the world's largest financial institutions -- which came during the financial crisis -- will go largely unpunished.

"Individual criminal charges won’t get into that aspect of the scandal," Dayen writes, "and we’ll see some regulatory slaps on the wrist similar to the Barclays case. Meanwhile, banks will engage in a concerted effort to pin the blame on those “few bad apple” individual traders. Moreover, the US Justice Department will tout the arrests as bringing to justice illegal operators in the banking industry, and the other allegedly ongoing investigations, like into the series of interlocking housing bubble frauds, will fall by the wayside."

Documents released by the New York Federal Reserve Bank earlier this month showed that regulators in the United States and England knew that bankers were submitting misleading Libor numbers in the midst of the 2008 financial crisis but did little, if anything, to stop it.

And the Christian Science Monitor explored the question about why banks themselves, not just individuals, might be targeted for criminal prosecution:

If the banks reporting their lending rates have been giving intentionally inaccurate numbers, that could be a crime, says Robert Mintz, a former prosecutor who is now a partner at McCarter & English in Newark, N.J.

“If you issue false statements and you know someone is relying on them, that is enough for criminal liability,” he says.

Mr. Keneally says the banks could be charged with “fraud.”

Normally, in the case of a bank, a shot across the bow is usually enough to get the board of directors busy. That’s what apparently happened at Barclays, which agreed to pay a $450 million fine and allow its chief executive, Robert Diamond, and other top executives to resign.

An indictment would be the equivalent of a knockout.

“Basically no bank can survive a conviction,” says Annemarie McAvoy, an adjunct professor at Fordham Law School who was formerly in the legal department at Citibank. “Banking is based on trust, and if the customers lose faith, they can move to another bank.”

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