State-backed Lloyds Banking Group was today fined £218 million after it admitted "shocking" rate rigging practices, including ripping off the Bank of England over its financial life support scheme.
The penalties from UK and US regulators covered the manipulation of the benchmark repo rate - used to calculate fees due to the Bank for its support in the financial crisis - as well as the interbank lending rate Libor.
In a letter to Lloyds earlier this month, Bank of England governor Mark Carney said: "Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved."
Lloyds chairman Lord Blackwell replied: "This was truly shocking conduct, undertaken when the bank was on a lifeline of public support."
Lloyds has now paid £7.8 million in compensation to the central bank after it admitted manipulating the repo rate to try to reduce these fees.
It said those involved in the rigging practices had either left, been suspended, or were subject to disciplinary proceedings, and that it would consider "remuneration implications".
This is likely to mean clawing back bonuses of those directly involved, which could even extend to others - including senior management - should this be merited.
Lloyds becomes the seventh firm to be fined by the Financial Conduct Authority (FCA) for Libor-related misconduct but the regulator said the ripping off of the Bank of England was the first case of its kind.
Britain's FCA fined Lloyds £105 million, including £70 million for its attempts to rig the Special Liquidity Scheme (SLS) - the taxpayer-backed scheme to support UK banks during the financial crisis.
The rest of the fine related to the manipulation of Libor, the benchmark interest rate used in hundreds of trillions of dollars worth of loans and transactions from complex derivatives to mortgages.
Part of the Libor misconduct came after pressure from a manager over market perception of its financial stability during the financial crisis, the FCA found, as well as attempts to boost trading positions.
A trader quoted by the FCA said: "I've been pressured by senior management to bring my rates down into line with everyone else."
Libor rigging also resulted in a £62 million pay-out to America's Commodity Futures Trading Commission and £52 million to the US Department of Justice.
The FCA fine relates to the behaviour of Lloyds TSB and Halifax Bank of Scotland, part of the same wider group and at the centre of the financial crisis. Lloyds Banking Group remains 25% owned by the taxpayer following its rescue.
Tracey McDermott, the FCA's director of enforcement and financial crime, said: "The firms were a significant beneficiary of financial assistance from the Bank of England through the SLS.
"Colluding to benefit the firms at the expense, ultimately, of the UK taxpayer was unacceptable."
The repo rate probe covered a period between April 2008 and September 2009, involving four individuals - a manager and a trader at each firm.
Libor rigging took place between May 2006 and June 2009, with 16 individuals directly involved, seven of them managers - including one who was also involved in the repo misconduct.
The FCA said: "At both firms there was a culture on the money market desks of seeking to take a financial advantage wherever possible."
In one exchange it published, a trader was quoted telling a manager: "every little helps... it's like Tescos."
The FCA did not find there was "deliberate misconduct" by the banks but found that because of poor culture, and weak systems and controls, they "failed to prevent the deliberate, reckless and frequently blatant actions of a number of their employees".
Lloyds said "The issues subject to the settlements were restricted to a specific area of the business and were not known about or condoned by the senior management of the group at that time.
"The individuals involved have either left the group, been suspended or are subject to disciplinary proceedings. The group's board will now consider all the remuneration implications and potential actions available to it."
Lord Blackwell said: "The board regards the actions of these individuals between 2006 and 2009 as completely unacceptable. Their behaviour involved a gross breach of trust and we condemn it without reservation."
Chief executive Antonio Horta-Osorio said: "The behaviours identified by these investigations are absolutely unacceptable. We take the findings of these investigations, which relate to issues from some years ago, extremely seriously.
"Together, the board and the group's management team have taken vigorous action over the last three years to prevent this kind of behaviour, through closing or reducing our legacy investment banking activities."