THEY were said to be among the most talented of their generation, recruited after exhaustive interviews and gruelling internships. They worked at firms prepared to spend small fortunes to attract and retain them lest they take their skills elsewhere. Yet the moral bankruptcy of traders implicated in the rigging of the London Interbank Offered Rate (LIBOR), one of the world’s most important interest rates, is matched only by the incompetence with which they covered their tracks.

Take traders at the Royal Bank of Scotland (RBS), who left a trail of evidence in a trove of e-mails and audio recordings detailing how they set about trying to manipulate LIBOR, even after they knew investigators were looking into the issue. “We’re just not allowed to have those conversations over Bloomberg anymore,” said one trader, laughingly, in a call to another who a little earlier had asked in writing for a rigged rate. “Its [sic] just amazing how libor fixing can make you that much money,” was the verdict of another trader.

These exchanges, and many others, were part of a settlement announced on February 6th in which RBS admitted to rigging rates. It agreed to pay fines of $475m to American regulators and another £87.5m ($137m) to Britain’s Financial Services Authority. By the arcane mathematics determining the severity of regulatory fines, RBS is adjudged not to have been as bad an offender as UBS, which last year agreed to pay penalties of $1.5 billion, but is being dealt with a bit more harshly than Barclays, which paid fines of £290m. Regulators said they found attempts to rig LIBOR hundreds of times in at least four and a half years at RBS, compared with the “thousands” alleged in the case of UBS.

There is now a sense of routine about these settlements: the early leaks, the embarrassing e-mails, the big fines. That can make LIBOR seem like just another problem for banks to manage. RBS’s share price rose on the day of its settlement. Even setting aside the threat from litigation, that is to underplay the import of the scandal.

First, whether they had any knowledge of wrongdoing at their bank or not, the executives who were in charge of investment banking at the time rate-rigging took place find themselves under pressure to leave. At Barclays that meant the departure of Bob Diamond, the bank’s former chief executive. At UBS almost the entire leadership team at the investment bank has changed (although many were undone by a separate rogue-trading scandal). At RBS John Hourican will leave as head of the investment-banking arm, despite not being directly implicated in the LIBOR affair.

If regulators are demanding the heads of whoever was running the investment bank at the time of wrongdoing, whether they were complicit or not, that could make life uncomfortable for executives at banks yet to go through the regulatory wringer. On February 6th, for example, Deutsche Bank reportedly suspended several traders over the alleged manipulation of EURIBOR, a cousin of LIBOR. If Deutsche ends up in the same spotlight as RBS, Barclays and UBS, awkward questions will surely be asked of Anshu Jain, the co-chief executive of Deutsche Bank and the ex-head of its investment bank.

Holding executives accountable is not without risks: good people may be forced out of banks when they need them most. But it does focus the mind. The second, lasting effect of the LIBOR scandal is to make bosses pay more attention to compliance and culture. “A lot of the bank CEOs I talk with don’t worry that regulatory change could shut them down,” says Ted Moynihan of Oliver Wyman, a consultancy. “But they see the conduct issue as potentially existential.”

The scandal has also hardened the views of regulators and politicians. The inadequate risk controls at RBS will reinforce a perception that some banks have become not merely too big to fail, but too complex to manage. UBS is slimming its investment bank radically. Barclays is planning to reduce the size of its wholesale bank. RBS may face pressure to shrink its investment bank further. The storm around LIBOR is less intense than it was but its consequences are immense.