Columnist Jonathan Weil poses in June 2007, in Broomfield, Colorado. Weil writes commentary for Bloomberg News. Source: Jonathan Weil via Bloomberg News.

If Barclays would lie about its borrowing costs, what else would it lie about? That question gets to the heart of the damage Barclays did to itself by submitting false numbers for years to the British Bankers’ Association as part of the surveys used to set the London interbank offered rate (Libor), the benchmark for $360 trillion (R2 900 trillion) of financial instruments globally. The most important asset any bank has is trust – especially when it comes to its own financial statements. Whatever credibility Barclays had, it’s been poured down the drain.

Andrea Leadsom, a member of the UK parliamentary committee that grilled former Barclays chief executive Robert Diamond at a hearing, framed the issue well when she asked him: “In light of the fact that your audit failed to notice for several years that there was fraud and corruption going on under your noses and very openly, have you now looked at other areas of the bank to see whether something like that has been going on there for years, too?”

Diamond, who resigned on Tuesday, replied: “Of course.” His terse response came off as less than credible.

The trust deficit is evident in Barclays’s market value. At £20.6 billion (R263bn), Barclays trades for a mere 37 percent of its common shareholder equity, which shows that investors believe most of its £55.6bn book value is fictional. The price-to-book discount also can be explained partly by the soft nature of some of its assets.

Barclays showed £7.8bn of intangibles as of the end of December – things such as goodwill and customer lists – as well as £3bn of deferred tax assets. Such items would be useless in a crisis.

Additionally, in the footnotes to its annual report, the company said the fair market value of its loans was £14.6bn less than their carrying value on its books. The bank also said about £32bn of its financial assets were of the level 3 variety, which meant their values depended on data that were not observable in the marketplace, making them easy to fudge. The less investors trust Barclays, the less they will trust these kinds of subjective estimates.

Barclays shares fell 16 percent after news broke last week that the company had been fined $453 million by US and UK authorities. Clearly, Diamond and Barclays’s outgoing chairman, Marcus Agius, had to step aside to show the company cared about its reputation.

It must do more. For instance, the head of Barclays’s audit committee, Michael Rake, was the chairman of the accounting giant KPMG International when its US affiliate was caught selling fraudulent tax shelters to hundreds of wealthy Americans. That resulted in $456m of fines from the Justice Department in 2005 and an admission of criminal wrongdoing by the US firm.

Although Rake was not implicated in any way, his promotion this week to deputy chairman of Barclays looks like an obvious case of the wrong person for the job at a time when appearances are everything.

What’s truly depressing is the thought that Barclays is only the first bank to settle with regulators over the Libor affair. Eventually, when others reach their own accords, similar inquiries will be made of their top officers.

Jonathan Weil is a Bloomberg View columnist. The opinions expressed are his own.