Perth man accused of interest rate swindle

A Perth man is behind bars, accused of playing a role in one of the world's biggest financial scandals.

Paul Thompson is reportedly being held at a prison south of Perth and is facing extradition to the United States, where he's accused of rigging interest rates.

It's alleged he had a hand in manipulating a benchmark interest rate used to set the rate on loans around the world worth trillions of dollars, including home loans in Australia, The West Australian reports.

The scandal has seen banks fined billions, and dozens of people have also been charged with rigging the London Interbank Offered Rate, or LIBOR, to boost profits, the paper says.

The LIBOR is set daily and represents what banks either need to borrow or can afford to lend and is regarded as a measure of the health of the banking sector.

Mr Thompson is reportedly facing wire fraud and bank fraud offences relating to his role with Dutch multinational Rabobank in Singapore between 2006 and 2011.

Two former Rabobank traders are on trial in the US for similar offences.

A family spokesman has said Thompson will seek bail, while they weigh the threat of extradition.