As both ASIC and APRA have pointed out, the BBSW was in fact different to the LIBOR rate.

The BBSW was set by a panel of 14 banks that submitted actual trades rather than hypothetical levels so in theory it should be very difficult to fix the rate.

That appears not to be the case. With the benefit of hindsight, Mr Debelle may concede he was guilty of underestimating the ingenuity and the determination of traders to enrich themselves through ever so subtle actions. He did however point out that in light of the scandal, the BBSW setting process was "worth looking into."

The powerful force of incentives as a force for good and evil is a defining feature of the financial system and one that regulators have only begun to appreciate after it nearly blew everything up.

With the benefit of hindsight, the RBA's Guy Debelle may concede he was guilty of underestimating the ingenuity and the determination of traders to enrich themselves through ever so subtle actions. Michel O'Sullivan

That combined with changing market conditions and Australia's small clubby trading community made the market more susceptible to systematic manipulation and "front-running".

Over the past two years and in particular in recent weeks, The Australian Financial Review has spoken to a handful of former traders with knowledge of interest rate and derivative markets.

Their accounts are of a market controlled by certain large traders, some of whom used their market power and value to bully brokers into favourable fixes of various varieties.

The malevolence of a small group of traders may very well have extended beyond fixing rates, some have suggested.

Both ASIC and APRA have mentioned the power of incentives so in that regard their investigations would have been well served by following the traders' bonus trail and how their share of the pot was generated.

Mr Medcraft's determination may have the banks on edge but many believe that many of the culprits have cashed in their bonuses, covered their tracks and retired in peace.