Traders might have rigged Libor for even longer

"Mercenary" traders at UBS could have been manipulating Libor interest rates for years before the period it paid a record $1.4bn (£873m) in fines, its former bosses admitted yesterday.

Managers, including former chief executive Marcel Rohner, were accused of "incompetence and gross negligence" by members of the Parliamentary Commission on Banking Standards for failing to spot what the executives admitted was "stealing on a grand scale".

The fine was levied for activities by traders between 2005 and 2010 but former UBS investment banking chief Huw Jenkins told the commission: "It [Libor fixing] was a very engrained part of the business areas so it would not surprise me if it was going on before that. I'm clearly deeply sorry we didn't spot this. It is clearly a failing in our systems and controls and our culture that it wasn't highlighted."

Mr Rohner later explained the problem by saying: "When you grow a business too quickly, you hire people from many different places and some of them... you really have to qualify as mercenaries."

Members of the commission, who were told that Mr Jenkins was on a £10m package, looked on aghast when his successor Jerker Johansson admitted that he didn't even know of an internal review into the business area that dealt with Libor.

About 40 traders were involved. Some 18 were sacked and a further 22 had left the Swiss bank before the scandal. Under pressure from Pat McFadden, a Labour member of the commission, and the chairman Andrew Tyrie, Mr Johansson admitted that management failures were so bad they amounted to negligence.

The bank's senior yen Libor trader managed to rack up profits of $40m, then $80m, then $160m between 2005 and 2007, and bosses highlighted the operation as a "key strength" in a presentation to London investors. But they failed to raise questions about why the numbers were booming.

Mr Tyrie described their ignorance as "staggering". Mr Johansson admitted negligence and said that what went on amounted to theft by the traders.

Hector Sants, the former chief executive of the Financial Services Authority, told MPs that Britain is in danger from foreign banks that operate unregulated branches in the UK.