Former Barclays boss Bob Diamond was "highly selective" in his evidence to MPs, a powerful Parliamentary committee has concluded.
The Treasury Select Committee said Mr Diamond's evidence on the Libor-fixing scandal had fallen well short of the standards expected by Parliament.
The MPs published the initial findings of a probe into the circumstances surrounding the fixing of the Libor rate, which sets inter-bank lending prices, an offence for which Barclays was fined almost £60 million in June.
In the report, the Bank of England was cleared by MPs of directing Barclays to artificially lower the Libor rate, as MPs found the bank was already doing so and it "did not need a nod, a wink or any signal from the Bank of England to lower artificially their Libor submissions".
But both the Bank of England and the Financial Services Authority (FSA) were criticised for failing to spot the manipulation of the Libor rate. And the MPs found that "it is highly unlikely Barclays was the only bank attempting this".
Publishing the preliminary findings report, committee chairman Andrew Tyrie said: "The committee has called for action in a number of areas, including: higher fines for firms that fail to cooperate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England.
"The sustained rigging of a crucial benchmark rate has done great damage to the UK's reputation. Public trust in banks is at an all-time low. Urgent improvements, both to the way banks are run and the way they are regulated, is needed if public and market confidence is to be restored. The manipulation was spotted neither by the FSA nor the Bank of England at the time. That doesn't look good. Select committees are entitled to expect candour and frankness from witnesses before them. Mr Diamond's evidence, at times highly selective, fell well short of the standard that Parliament expects, particularly from such an experienced and senior witness."
A Treasury spokesman said: "We welcome the Treasury Select Committee's detailed and prompt report, which Government will study in depth. The manipulation of key global benchmark rates has been another example of a culture of irresponsibility within the banking system, which the Government is determined to fix as quickly as possible. The Government has already established the Wheatley Review into Libor, which published a discussion paper last week and will produce final recommendations by the end of the summer, and any necessary legislative changes will be considered for inclusion in the Financial Services Bill or the Banking Reform Bill."
A Barclays spokesman said: "We will carefully consider this comprehensive report. While we don't expect to agree with every finding in it, we recognise that change is required, not least to restore stakeholder trust. That is why we have established an independent review of our business practices under Anthony Salz, and we expect that review to take full account of this report in producing its recommendations."
The British Bankers' Association (BBA) said: "This is a significant contribution to the work the British Bankers' Association and the regulatory authorities have been undertaking to ensure the integrity of the benchmark. The BBA is providing the research and findings from its current review to the Wheatley review and is engaging constructively with the Parliamentary Commission on Banking. The absolute priority of everyone involved in this process is to ensure the provision of a reliable benchmark which has the confidence and support of all users, contributors and global regulators."