We do not yet have a very good context for the costs of the Libor rate-rigging scandal. We know that derivatives traders gained when they called in favors and had banks set the Libor in ways favorable to their bets. And we know that banks benefited from artificially setting the Libor down during the financial crisis to mask their poor fiscal health. But how did that manifest itself in the real world? The investment bank Morgan Stanley has penciled out an estimate of just the Libor suppression, the artificial rigging of the rate lower during the crisis. This does not take into account the derivative trading. And just on that alone, they come up with about $22 billion in fines.

That doesn’t totally get at what it cost the larger economy and what bonuses accrued to the banks as a result of this activity, something Yves Smith takes a stab at here:

Morgan Stanley provides an estimate of the impact of Libor suppression, 35 basis points for each year, 2007 to 2011 (see exhibit 10, third column from the right). That level is consistent with NC reader complaints during the criss (go NC readers!). I’m surprised that it would have continued at that level post, say, early 2009, but we’ll assume four years [...]

That gives you $2.9 billion across all 16 banks, or $180 million per bank. Times four years, you have $720 million. Compensation as a percent of investment bank revenues is typically 40% to 50%. So we have, on pretty conservative assumptions, roughly $290 to $360 million in extra comp on average per bank for Libor manipulation. This would presumably have gone to comparatively few people (recall Bob Diamond trying to say only 14 traders were involved, although the FSA said “at least 14″). Assume 20 per desk. plus everyone in the reporting line above would have benefitted, as well as the C level execs. So how many people is that? Maybe 50 tops? OK, let’s be really charitable and assume only 50% directly benefitted those people, the rest helped improve bank-wide comp (all those back office types, etc). Even assuming that, you have an average of $2.9 to $3.6 million in extra bonuses per person over the four year period.

The point here is pretty simple. Even if you go to some lengths to cut the numbers way down, you come to the conclusion that if this manipulation had any meaningful impact on the profits of the swaps and derivatives desks, a comparatively small number of people who’d be very cognizant of the manipulation by virtue of seeing the contrast between posted Libor versus actual market prices, likely profited very handsomely. And the people up the line would have benefitted as well.

In a separate post, Yves looks at what loans could be affected. Shahien Nasiripour estimated about 900,000 mortgages originated from 2005 to 2009 based on Libor. But you have to also include TALF loans, the Federal Reserve program designed to spur consumer credit lending. Those loans were based on Libor too. And we’ve already gone over how interest rate-swaps from municipal governments would be affected.

So there’s a difference between looking at the expected damages, and the actual damage to the economy and to ordinary loans. And there’s still another level of analysis you have to do to get to the rewards from the small coterie of bankers and traders doing the rigging.

One thing’s for sure: we’re not going to see any of this kind of analysis on the broadcast news media, save for Chris Hayes’ show.