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During the 2008 financial crisis, the London Interbank Offered Rate (LIBOR) was a key barometer of the failing health of the banking sector. When LIBOR spiked in late summer 2008, it was a clear sign banks weren't willing to lend to other banks and the term "counter-party risk" became part of the vernacular.

LIBOR is the rate at which banks will lend to other banks and a critical component to the inner-workings of the global financial system. As with the 10-year Treasury note and fed funds rate, literally trillions of dollars of other financial instruments -- including corporate loans and mortgage rates -- are pegged to LIBOR, making it one of most important financial indicators in the world, if not the most important.

Fast-forward to today and the events of 2008 still resonate.

Last week, Barclays paid roughly $450 million to settle charges by U.S. and U.K. regulators that its traders had manipulated LIBOR. A day after he resigned as Barclays CEO, Robert Diamond appeared before U.K. Parliament last week and testified that regulators on both sides of the Atlantic were aware of irregularities in the LIBOR market as far back in 2007 and did nothing about it.

Barclays felt that some competitors were low-balling the rates being charged by other banks in order to make themselves look better to regulators and investors. In addition, Diamond testified that Paul Tucker, now a deputy governor at the Bank of England, expressed concern that Barclays was reporting higher LIBOR rates than some competitors; at least one Barclays executive took Tucker's concern as a signal Barclays too should report lower LIBOR rates.

Tucker is set to testify before Parliament Monday on these matters, which have gripped London's financial circles much in the same way all of Wall Street was watching Jamie Dimon's Congressional testimony last month.

But JPMorgan's estimated $3 to $5 billion loss on its 'London Whale' trades really is a tempest in a teapot -- as Dimon initially declared -- compared to allegations of LIBOR manipulation. Imagine finding out the Dow is rigged or the S&P 500 doesn't really measure the stocks of the 500 largest U.S. firms and you have a hint at how big a deal this really is.

In addition to allegations firms were under-reporting LIBOR rates during the crisis, there's a second scandal: that Barclays traders allegedly rigged the LIBOR rate to ensure certain derivatives bets paid off.

If recent history is any indication, it's very unlikely Barclays traders were operating in a vacuum; typically if one Wall Street firm is pushing the envelope (or breaking the law) to gain an advantage, its competitors won't be far behind. Most observers believe Barclays is just the first firm to settle related allegations.