The latest scandal in the financial industry concerns banks’ manipulation of Libor, a benchmark used to determine interest rates for wide variety of loans, from mortgages to student loans to commercial loans. US Representative Barney Frank, a Newton Democrat, was formerly chairman of the House Financial Services Committee and coauthored the sweeping financial reform law known as Dodd-Frank. He spoke recently with Globe reporter Beth Healy about the Libor interest-rate rigging scandal, its potential impact on implementing Wall Street reforms, and Democrats’ efforts to boost regulatory funding.

What’s your sense of how this Libor rate-rigging happened and how it could have been prevented?

It’s really shocking. There have been problems where people make bad judgments. But this is conscious deception — by far the worst behavior I’ve seen on the part of these leaders in the financial community. What it does is reinforce my view that this notion of self-regulation is a mistake.

The Republican approach has been to say, “We’re not going to spend public money for these regulatory agencies. We’re going to encourage the institutions themselves to regulate; let’s not be too intrusive.” This just knocks that totally off the field. This is a set of behaviors that makes me think that we really cannot trust them very much.

In your view, was there criminal behavior here?

They should be looking at criminal prosecution. People said why didn’t more people go to jail? Well, one of the reasons we had to pass a very comprehensive set of rules in 2010 is that a lot of stuff that should have been illegal wasn’t illegal.

 We really shouldn’t be talking about sending people to jail when the law was vague. It’s due process — they have a right to know what the law was. But in the Libor case, it does look to me like there was criminal behavior, although that has to be looked at very specifically.

What can Congress do to prevent this kind of wrongdoing?

Well, first of all, it reinforces the view that we need to better fund the regulators. I think it rebuts the argument that we have been over-regulated and intrusive, that we should leave them more to themselves. The answer is, no. We can’t trust them.

 It means the rules have to be more prescriptive, that the Volcker rule and these other rules, they should be tougher. And organizations like the Commodity Futures Trading Commission and the Securities and Exchange Commission should be getting more money. The Republicans, incredibly, want to give the CFTC, which is the derivatives regulator primarily, less money next year than this year. They want to cut them — $205 million to $180 million. We’re talking about hundreds of billions of dollars at risk.

Does international regulation have to be improved as well? The US can’t do it all alone, right?

Right, but part of it is we cannot rely on them. We’ve gotten complaints from the British saying, “Oh you Americans, you’re trying to regulate activity in our country.” And the answer is, “Yeah, we will until we think you’re doing a better job.”

 We should not be deferring to them in our regulation.

How does this weigh on the rule-making that’s underway for Dodd-Frank, which critics say has been slowed by lobbyists trying to water down the bill?

It means you reject these notions that you should be looser and vaguer and leave them more flexibility. It augurs for rules that are more prescriptive and not so much, “Oh, trust us.” The answer is, no. This Libor thing is just extraordinary. This is not incompetence, this is not greed or overreaching. This is fundamental dishonesty.

But lobbyists for the banks and Wall Street firms are still pushing back hard?

I think the regulators want to do the right thing. [The Libor scandal] will strengthen their hand and make it easier for them to resist the pressure.

We will be voting this week or next on the budget for the CFTC. The way the budget works, you can’t increase without decreasing somewhere else. So the most we were able to offer was a $25 million increase. That’s not huge, but it’s symbolic. We’ll see whether the Republicans in the face of all this are going to continue to say the CFTC shouldn’t get any money.

What will happen to Dodd-Frank if Mitt Romney wins the election?

I think it will be too unpopular to repeal it. Unlike health care, they haven’t pushed for a vote to repeal this — they’re chipping away at it.

And if Barack Obama wins?

I’m very confident, assuming Obama wins, a year from now the bill will be fully implemented.