Everyone should be paying attention to the Libor scandal, at least according to Warren Buffett.

"It's a big deal," Buffett told CNBC "Squawk Box" host Becky Quick Thursday. "You get Libor, and you're talking about the whole world."

Big banks have come under fire following allegations that many profited off the manipulation of Libor, a key interbank lending rate that acts as a benchmark for interest rates around the world. The first bank to admit wrongdoing, Barclays, agreed to pay more than $450 million last month to settle claims it manipulated the rate. The 16 banks under investigation by governments in Europe, the U.S., and Japan for allegedly rigging Libor include Bank of America, JPMorgan Chase, and Citigroup.

Rolling Stone's Matt Taibbi recently said it was likely that most or all of these banks were guilty of rigging Libor, since 16 banks help set the Libor rate every day. On CNBC, Buffett called Libor "the base rate for the whole world."

"Everything is tied in [to Libor]," Buffett said. "The idea that a bunch of traders can start e-mailing each other or phoning each other and play around with that rate is an important thing, and it is not good for the system."

Buffett said that unwinding the collateral damage from the alleged Libor rate-rigging will not be easy because millions of contracts are based on Libor.

"It is a can of worms," he said.

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  • Home Loans

    Libor is used to price the rates on various home loans, particularly adjustable-rate mortgages (ARMs), the <a href="http://speakingofrealestate.blogs.realtor.org/2012/07/13/libor-the-big-fix/" target="_hplink">National Association of Realtors reports</a>. If Libor is pushed upward, homeowners pay more. If Libor is pushed downward, investors pay more.

  • Consumer Loans

    Libor affects the interest rates on certain consumer loans ranging from credit card payments, student loans and car loans, <a href="http://www.npr.org/blogs/money/2012/07/09/156484153/identifying-the-real-victims-in-the-libor-scandal" target="_hplink">reports NPR</a>. According to NPR, <blockquote>"If Barclays traders managed to get the rates higher before the financial crisis, as they requested, then consumers suffered. Any loan that was adjusting based on LIBOR might have a slightly higher rate."</blockquote>

  • Savers

    If Libor was artificially pushed down, savers would get lower returns, <a href="http://www.newstatesman.com/blogs/voices/2012/07/real-cost-libor-scandal" target="_hplink"><em>The New Statesman </em>reports</a>.

  • Pension Funds and 401ks

    Pension funds and 401ks may have earned lower returns because of artificially lowered interest rates, <a href="http://money.cnn.com/2012/07/12/investing/libor-consumers/index.htm" target="_hplink">CNNMoney reports</a>.

  • Municipal Bonds

    At a time when <a href="http://www.huffingtonpost.com/2012/07/12/folsom-california-fire-department-crash-tax_n_1668537.html" target="_hplink">cities are charging for police and fire-fighting services</a>, and cutting back on their budgets, municipalities are claiming some of their losses are the result of Libor-rigging, <a href="http://dealbook.nytimes.com/2012/07/10/libor-rate-rigging-scandal-sets-off-legal-fights-for-restitution/" target="_hplink"><em>The New York Times</em> reports.</a>

  • $10 Trillion In Loans

    Some $10 trillion in loans and $350 trillion in derivatives are tied directly to Libor, <a href="http://money.cnn.com/2012/07/12/investing/libor-consumers/index.htm" target="_hplink">CNNMoney reports.</a>

  • Mortgage-Backed Securities

    Mortgage-backed securities would have earned a lower rate of returns as a result of an artificially-low Libor, <a href="http://www.guardian.co.uk/business/2012/jun/28/barclays-libor-scandal-question-answer" target="_hplink"><em>The Guardian</em> reports</a>.