Re: Working in a bank
Islamic banks invest in money market under shariah compliant modes like musahraka and mudaraba. This is how they are expected to earn halal profits. This is different form conventional who LEND/BORROW money- the mode for conventional is Qardh.
I open a roohafza shop in a wine market to cater muslims of the area. I make a statement that i will earn same margin as what wine sellers earn on a wine bottle. Does that make my rooh afza sale haram. No it does not. 
KIBOR/LIBOR is just benchmark of interest and not interest itself.
This is a good short book on the subject
http://www.meezanbank.com/docs/bankari.pdf
Shortest and most comprehensive defination of RIBA
It is reported by Sayyidna Ali, Radi-Allahu anhu, that the Holy Prophet, Sall-Allahu alayhi wa sallam, has said,
“Every loan that derives a benefit (to the creditor) is riba.”
This hadith is reported by Harith ibn Abi Usamah in his Musnad
A detailed account of two types of riba - riba alfadl and riba an nasiyah can be read here The Text of the Historic Judgment on Interest.
I have tried to be brief and to the point, if any thing is not clear or remained unanswered , just point that out inshallah i will try to answer.
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