Washington/London, June 28 (Reuters): UK bank Barclays will pay $453 million to US and British authorities to settle allegations that it manipulated key interest rates, increasing pressure on other banks to co-operate in a probe that could cost the financial industry billions of dollars.

The settlement raises fresh questions about the reliability of the London interbank offered rate, or Libor, which underpins some $360 trillion of loans and financial contracts.

The attempted manipulation, which according to authorities took place from 2005 through 2009, meant that borrowers paid too little or too much interest on their debt.

The US government implicated senior executives at Barclays in its settlement. It cited emails that showed how the bank sought to move Libor rates to profit on trades and to hide its high borrowing costs during the financial crisis.

Barclays chief executive Bob Diamond acknowledged that the settlement would damage customer trust in the bank. He said he and other senior executives would forgo their bonuses this year. Much of the improper trading and manipulation occurred under the watch of Diamond.

Barclays also tried to manipulate Euribor, a separately managed series of euro-denominated rates.

The bank settled on a civil basis with the US Commodity Futures Trading Commission, the US Department of Justice and the UK’s Financial Services Authority. The justice department is still conducting a criminal investigation.