As the world confronts yet another deep recession, it’s easy to forget what the public mood was like in the aftermath of the last financial crisis in 2008. Remember the circumstances? The world’s largest financial institutions had teetered on the verge of collapse. Those which were deemed too big to fail were bailed out with billions of pounds of taxpayers’ cash. Every single household lost an average of £31,000 in 2008 alone. A decade of austerity had to follow.

Who was to blame for all this? The answer was easy: the bankers. Those greedy cynics had been unleashed by decades of regulation and a constant stream of cheap money. They’d spent their careers flogging dodgy products to unknowing consumers and manipulating the system for their own gain. No one epitomised this better than those who had “rigged” global interest rates in order to make personal profits. In Britain, former UBS and Citi trader Tom Hayes and thirty-seven other traders were prosecuted as we sought desperately to pin the blame for all the misery on somebody — anybody.

In 2015, Hayes was sentenced to an astonishing 14 years imprisonment, later reduced to eleven on appeal. He had been found guilty on eight charges of conspiracy to commit fraud. The charges related to his activities whilst trading yen derivatives products in Tokyo. The Serious Fraud Office (SFO) successfully argued to the jury that Hayes was the ringleader in a global network of traders that sought to advantage their trading positions by rigging the London Interbank Offered Rate (LIBOR).

LIBOR is a benchmark interest rate used by the world’s largest banks to determine how much to charge each other when lending cash. As the rate underpins trillions of dollars’ worth of financial products, including commercial loans and mortgages, the SFO argued that Hayes and others had defrauded innocent consumers around the world.

Hayes was eventually released last year, after serving over five years in prison, much of it spent sharing cells with some of the country’s most notorious criminals: murderers, armed robbers and terrorists. There’s a growing consensus amongst those who have studied the case that Hayes has been the victim of one of the most egregious miscarriages of justice in modern times.

Britain is the only country in the world to consider this a crime

Everyone who knows how the system worked prior to 2008 realise that Hayes was operating in a perfectly normal and legitimate fashion. LIBOR operated by the British Bankers’ Association (BBA) asking a panel of major banks the rate at which it could borrow funds each day. Because there are many different ways to calculate an interest rate, and because the BBA’s question was essentially theoretical, each bank would end up with a number of different rates that could be submitted. After each bank had replied with its  chosen rate, the regulator would exclude the highest and lowest figure, then calculate an average of the remaining numbers. This figure would then be accepted as the benchmark rate for the day.

As LIBOR was unregulated, the exact nature of the rules was vague, and much of the process depended on culture. Before charges were brought against Hayes, there was a common understanding that banks were allowed to submit their rates whilst taking into account commercial considerations. Within the range of rates that the bank had calculated, traders could request “higher” or “lower” depending on what would be best for their open positions. Why wouldn’t they? Every rate would be accurate and satisfy the BBA’s definition. Why not choose the one that also happened to be the most beneficial? Banks are profit-making entities, after all, and the job of people like Hayes is to make money for their institution.

Hayes’ crime was to ask his colleagues to submit rates that would help him do his job — make money for the bank. John Ewan, the former Director of the BBA, is on record as being aware of this being a widespread practice as early as 2005, despite later testifying otherwise at Hayes’ trial. Because of this, Hayes had no reason to believe he was doing anything wrong, hence why he made his requests on recorded phone calls and emails. This later made it easy for the SFO to produce “evidence” of his allegedly fraudulent activity.

Despite criminal charges being brought against dozens of traders, the Financial Conduct Authority (FCA) has not sanctioned a single individual on regulatory grounds. The FCA actually investigated one of Hayes’ colleagues at UBS, who had similarly requested higher or lower LIBOR rates, and concluded that he’d done nothing wrong — evidence that the judge ruled impermissible at Hayes’ trial. The judge also refused to consider evidence submitted by the financial experts who had built EURIBOR, the eurozone equivalent to LIBOR, which clearly stated they intended commercial considerations to be part of the system.

The authorities in Japan, where Hayes worked at the time of the alleged “rigging”, also didn’t sanction him or anybody else for this activity. Now that convictions for supposed LIBOR manipulation in the United States have been overturned, after a Manhattan court ruled that rates could be both accurate and commercially-influenced, Britain is the only country in the world to consider this a crime. How can that position hold?

Hayes was the convenient fall-guy for authorities

What makes the Hayes case even more remarkable is that, thanks to the work of the BBC’s Economics Correspondent Andy Verity, we now know that senior figures at the Bank of England and Barclays were also involved in this practice — on a scale exponentially larger than anything ever attempted by Hayes. Leaked audio footage reveals that senior officials conspired to keep Barclays’ LIBOR rate artificially low in the immediate aftermath of the financial crash. As access to cash became more expensive and difficult, the idea was that the bank could pretend to be in a much more secure position than it was, to prevent widespread panic. Yet despite the precedent set by the Hayes case, no charges have been brought against anybody involved.

It now seems overwhelmingly likely that Hayes was the convenient fall-guy for authorities who needed a scapegoat for the country’s legitimate anger after the crash. Some may believe that the actions of traders such as Hayes were unfair, dishonest or even immoral. Whether any of that is true is beside the point. What’s certain is that their actions were not criminal — as every other country in the world has recognised.

The fact that Hayes’ conviction still stands is a shameful stain on a country that claims to believe in justice and the rule of law.