The Financial Services Authority fined Barclays £59.5m this week for significant failings in relation to LIBOR and EURIBOR, after it attempted to profit from the settlement process.

The fine was the largest-ever fine by the FSA, and was accompanied by a further £230m in penalties from US regulators. But Barclays qualified for a 30% discount on its UK penalty under the FSA’s settlement discount scheme, after working with the FSA.

Without the discount the fine would have been £85m, and Buxton suggested that had implications for others involved in the probe.

“Barclays will likely have the lowest fine of all the banks under investigation,” said Buxton, who manages the £2.5bn Schroders UK Alpha Plus fund and heads up the UK equities desk at Schroders.

“I am pretty confident that in these situations where there has been a breach of regulation, the first bank that settles will be proven the one that identifies its own issues and has cooperated the most with authorities in uncovering the breach of the regulation.”

Barclays’ share price held up relatively well on Wednesday following the news, before plunging as much as 18% yesterday – eventually closing down 15.5% – as a political firestorm took hold.

Politicians’ anger was fuelled by a scathing speech from George Osborne who attacked Barclays traders for “systematic greed”.

Meanwhile Liberal Democrat Treasury spokesman Lord Oakeshott called on Diamond to quit. Despite Buxton’s concerns, however, the manager is still positive on the long-term outlook for UK banks, seeing the sector as having made good progress towards paying down debts and making returns on captial over recent years.

Buxton holds a 9% weighting to the sector in his fund, including exposure to Barclays, which he is poised to add to on dips.

“It is a long, slow, painful journey but you will be rewarded for being a patient investor,” Buxton said.

“All we can do is keep our eye fixed on the three to five year view and take advantage of really bad days to add to our holding. “Barclays is approaching the ‘buying zone’.

“In this degree of volatility you just pick your moment and on particularaly bad and gloomy days it can be attractive time to add.”

The FSA said Barclays made submissions which formed part of the LIBOR and EURIBOR setting process that took into account requests from Barclays’ interest rate derivatives traders.

These traders were motivated by profit and sought to benefit Barclays’ trading positions. It also sought to influence the EURIBOR submissions of other banks contributing to the rate setting process.