Libor penalty: harsh times - FT.com In the same way a bank can be too big to fail, a penalty could be too catastrophic to impose. The probe into interbank lending rates has already forced Citigroup into a $50m write-off. But now that investigations into possible manipulation of the London Interbank Offered Rate have accelerated, the extent of possible damages may be too scary for lawmakers to implement.There are about $350tn worth of Libor-linked products globally. Should a bank or two be found guilty of manipulating the rate by, say, 0.03 percentage points over 10 years, the theoretical compensation could be $1tn - equivalent to the entire market capitalisation of the FTSE Eurofirst 300 banks index. Such a penalty could, of course, never be practically implemented. Customers who lost out will have to suck it up.