Flaws in the way Libor is set allowed individual banks tomanipulate the key global interest rate for profit for years,according to traders.

While employees allegedly tried to rig the benchmark for $500trillion of securities worldwide, they didn't need to conspire withcounterparts at other firms to affect where the rate was set eachday, as some regulators concluded, said the people, one of whomlost his job for trying to distort the rate. By nudging their ownfirms' submissions up or down in small increments they could boostthe value of their trading books or cut their losses, said thepeople, who asked not to be identified because regulators are stillinvestigating the Libor-setting process.

The ability of a single bank to rig the London interbank offeredrate also is highlighted by e-mails disclosed when Barclays Plcpaid a 290 million-pound ($452 million) fine to U.S. and U.K.regulators for manipulating the benchmark, and by academic studies.The settlement forced the resignations of the top three executivesat Britain's second-biggest bank by assets, including ChiefExecutive Officer Robert Diamond, 60.