A former ANZ trader says he was threatened and told he would be made a scapegoat over a rate-rigging scandal that has dragged in Australia's biggest banks.

Key points: ANZ sacked Etienne Alexiou as part of a probe into rate-rigging allegations

ANZ sacked Etienne Alexiou as part of a probe into rate-rigging allegations The bank says he sent offensive messages on an internal system

The bank says he sent offensive messages on an internal system Mr Alexiou says he is being made a scapegoat to protect ANZ's interests

Mr Alexiou says he is being made a scapegoat to protect ANZ's interests In court documents he says he was helping ASIC before his sacking

The trader, Etienne Alexiou, said he believed he was dismissed as part of a strategy by ANZ to manage the fallout from allegations it tried to rig a key interest rate called the bank bill swap reference rate (BBSW).

"ANZ had previously threatened to make me out to be 'Mr BBSW' and warned me that I would 'need a publicist' and asked me 'how will it feel when your son is being pushed around in the playground'," he said.

ANZ said it was not aware of any threats made to Mr Alexiou by any ANZ employee.

It also said his sacking related to highly inappropriate and offensive electronic communication.

"Appropriate conduct, compliance with ANZ policies and respect for others is paramount at ANZ," a spokesman said.

Mr Alexiou was ANZ's global head of balance sheet trading, where he was responsible for hundreds of billions of dollars.

He was one of seven employees stood down by the bank in November 2014 as part of an internal probe into BBSW rate-rigging allegations.

He has denied ever manipulating the rate and no accusations that he was involved were ever levelled against him.

Bank sacks trader over offensive messages

Despite this, he was later sacked in September 2015 after ANZ discovered he had sent offensive messages on the company's internal message system.

Mr Alexiou later took the bank to court claiming unfair dismissal and seeking compensation of around $30 million.

He dropped the case earlier this month citing mounting costs and the pressure on his family.

Mr Alexiou denied he had an axe to grind against the bank after discontinuing his case.

"In the scale between myself and ANZ I would appear more like a bug than a man grinding an axe," he said.

"The experience in this case has been really awful. It's been awful personally and particularly for my family and friends who have supported me throughout.

"I often felt helpless in the fight. It's been awful financially and professionally.

"I have been used, in part, to serve a purpose in ANZ's strategy to protect its interests, when it suited it."

Alexiou assisting ASIC before sacking: court documents

Mr Alexiou cannot speak in detail about his time at ANZ due to confidentiality agreements.

But according to court documents filed by his lawyers, he says he was assisting ASIC in the months before he was stood down along with a number of other staff.

The BBSW scandal has seen the corporate regulator ASIC challenge three of Australia's biggest banks, in Victoria's Federal Court.

The rate is used as a reference for around $20 trillion in financial products.

The Australian Banking Association, which represents the banking industry, said even if the allegations were true, everyday people would not have been affected.

"The BBSW is about pricing between banks on a day to day basis," said chief executive Steven Munchenberg.

'There have been various claims out there that this has cost Australian consumers billions of dollars. They're completely fanciful.'

Cost of rate-rigging 'could have trickled down' to consumer

Super funds, however, said they may have been substantially affected.

"In total, even if it was just, for arguments sake 1 per cent of the $450 billion in assets, that's $4.5 billion," said Industry Super Australia spokesman Matt Linden.

"It's difficult to work through the effect of when the BBSW was higher or lower, but they're certainly not small sums of money."

Dr Andrew Schmulow, a lecturer at the University of Western Australia, said any potential manipulation could have trickled down to a wide variety of goods and services.

"These manipulations will have the effect of distorting the free market, especially the market of interest rates, which in turn is the cost of finance, which is a cost like petrol, which is built into absolutely every form of goods and services in the real economy," he said.

"So eventually these manipulations will trickle down to your mortgage, your car finance, your credit card, your personal loans and your business loans."

ASIC denies dragging heels on rate-rigging investigation

Mr Schmulow has been critical of the time it has taken ASIC to take bring the banks to court.

It has taken four years for ASIC to file cases against the banks.

Background Briefing can reveal that at one bank, ANZ, investigators were examining more than 120 incidents stretching back to 2008, but due to delays in bringing its case, many of these have not been able to be included in ASIC's case.

ASIC said it had not dragged its heels in this investigation.

"ASIC has been working hard as it has with any investigation, as it does with any investigation," said ASIC Commissioner Cathie Armour.

Hear Mario Christodoulou's full investigation into the rate-rigging scandal on Background Briefing at 8:05am on Sunday, or subscribe on iTunes, ABC Radio or your favourite podcasting app.