Regular readers know that the simple fix is to require all banks that are Libor panel members to provide ultra transparency and disclose on an ongoing basis their current global asset, liability and off balance sheet exposure details.
With these details, Libor can be calculated off of actual trades.
With these details, the interbank lending market will unfreeze and remain liquid as banks with funds to lend can assess the current condition and risk of any bank looking to borrow.
The report confirms that Libor was designed to be easy for the banks to manipulate without fear of being held to account.
A former member of the Libor compilation team at Thomson Reuters says it regularly warned senior BBA staff about the problem.
Its reports regularly highlighted the implausible rate submissions of several banks involved in the Libor process.
The BBA denied these had amounted to warnings of wrong-doing.
Each day the six-man team at Thomson Reuters would calculate the various Libor interest rates, based on estimates submitted by staff from a panel of banks about how much it would cost them to borrow in the financial markets, in various currencies and for various durations.
The highest and lowest estimates were discarded as outliers and the average rate derived from the remaining ones, and then published.
The warning reports from the Libor team were passed to John Ewan, the BBA's head of Libor, who now works for Thomson Reuters....
Mr Ewan told the Libor team he would look into the repeated evidence of unusual Libor submissions, which were coming increasingly frequently from several banks.
"I wouldn't say he took no action," the Libor rate-compiler assured the BBC.
"He took notice of them. Action was taken. But the BBA was not very effectual at the time."...
The member of the Libor compilation team told the BBC that, for six months in 2008, it became very obvious that something fishy was going on.
"Definitely, it was a daily thing," the former employee said.
"For three-month Libor, one bank might say 4.5%, Barclays 5%, UBS 3.5%."
"We would ask 'what's all that about?' and phone them up," the compiler said....
The former employee told the BBC that the suspicious rate submissions to the Thomson Reuters team became particularly obvious after the collapse of the US investment bank Bear Stearns in March 2008, which had to be bailed out by the Federal Reserve Bank of New York.
"After that all bets were off," the Libor rate-compiler said.
"You'd be making calls for half an hour each day, saying 'you've quoted this, other banks are higher, do you want to revise your rate?"
"A number of banks were quoting wildly differently," the person pointed out.
The rate-compiler said it became obvious to quite a few money-market traders that something was fishy, because the team would receive calls from traders querying the quotes submitted by other banks.
"It is not possible to hide what was happening," the compiler said.
"I think all the guys who were contributing on a daily basis and involved in the trades would have known.
"They would have been saying: 'He's quoting nonsense, why should I be quoting a real rate if he is quoting nonsense?" the rate-compiler explained.
And how many people in bank dealing rooms would have been aware of all this?
"Across 16 banks you've got to be looking at 150 to 160 people [maybe] half that were involved in day to day trading and querying [other banks quoted rates]," the person said....
In response to these points, the BBA acknowledged that it had been told of some misgivings by the Libor team.
"As part of the process Thomson Reuters queries rates which fall outside normal tolerances," said a BBA spokeswoman.
"In 2008 reports from Thomson Reuters were submitted to the independent foreign exchange and money market (FX&MM) committee which was then able to request further information from submitting banks.
"The BBA was at no time aware that rates were being manipulated but, as a result of the overall picture [of which Thomson Reuters' reports played a part] of a widely dysfunctional market - the BBA launched its 2008 consultation," she added.
During 2008, the BBA initiated a review of the Libor-setting process, a review which it is now known was initially regarded by the Bank of England as wholly inadequate.
From the perspective of someone working in the Libor team, the rate-compiler said the BBA did not seem on the ball.
"I think the BBA was totally ineffectual," the former employee said.It was suppose to be.
"It should have known what was happening and should have been jumping up and down.
"No-one was standing up and saying 'this is wrong'," the rate-compiler added.