Former trader Hayes wanted to do a perfect job, Libor trial hears

* Defence opens case in trial of alleged Libor manipulator

* Defendant Hayes, former UBS (NYSEArca: FBGX - news) , Citigroup (NYSE: C - news) trader, takes stand

* Hayes says only said he was dishonest to avoid US extradition

By Kirstin Ridley

LONDON, July 7 (Reuters) - Tom Hayes, the first person to face trial by jury over allegations he conspired to rig global Libor interest rates, told a London court on Tuesday he had not acted dishonestly and just wanted to do his job as "perfectly as he could".

Taking the stand for the first time in the high-profile trial at Southwark Crown Court, the 35-year-old former UBS and Citigroup star trader said he had only admitted to wrongdoing in interviews with British officials because he wanted to avoid extradition to the United States.

Hayes told the court that during interviews with British investigators in the months following his arrest in December 2012 he had acknowledged dishonesty in the hope that British charges would protect him from a tougher U.S. sentence.

Hayes, who has pleaded not guilty to eight counts of conspiracy to defraud between 2006 and 2010, said his initial cooperation with Britain's Serious Fraud Office (SFO) was driven by panic after he saw Lanny Breuer and Eric Holder, two of the most powerful lawyers in the United States at the time, announce he had been criminally charged on Dec. 19, 2012.

"I was frozen with fear ... basically I was petrified. I faced three counts and each count carried a 20 or 30 year sentence," Hayes told the court.

The SFO alleges Hayes set up a network of brokers and traders that spanned some of the world's most powerful financial institutions to influence Libor rates -- designed to reflect the cost of inter-bank borrowing -- for his own trading benefit, prejudicing the interests of others.

DRIVEN BY HUNGER

Hayes said all he had ever wanted to do was do a good job for his employers.

He told SFO investigators in 2013 he had been greedy when trying to influence Libor, the London interbank offered rate that is used as a benchmark for around $450 trillion of financial contracts from home loans to derivatives worldwide.

But on Tuesday, he said this was the wrong word to describe his work ethic.

"Hunger is a better word than greed," he said: "I was hungry to do the best job I could do."

Based in Tokyo, Hayes traded in yen-denominated derivatives tied to Libor. Small movements in the rate could translate into sizeable profits for his trading book, although he stressed that not all of his trading book was exposed to the rate.

Hayes, who has said he was extremely open about trying to influence rates, that his managers knew what he was doing and that the practice was widespread, told the court he believed banks at the time tended to submit Libor to flatter commercial interests.

Banks wanted to join the official panel that allowed their submissions to be counted towards the official daily rate because this "allowed them to make commercially favourable submissions", he said, adding that he failed to see why this was wrong - as long as the number was justified.

Asked whether he thought it was honest to try and affect Libor rates, he said: "Yes, because the answer is honest, accurate and in line with the question (banks need to answer when submitting their cost of borrowing rates). I don't see why the mere fact that it's chosen on a commercial basis is wrong."

FOR THE LOVE OF NUMBERS

Nicknamed "Tommy chocolate" by brokers because of a tendency to order a hot chocolate while others drank beer, the former maths graduate said he had a love/hate relationship with his job as a trader and sometimes felt sick with stress.

"It could make you feel physically sick every day getting to work ... But when you get it right ... and you see that number pop up on your screen ... It's just so pure."

Making almost daily requests of traders and brokers about where he wanted Libor rates was just a "numbers game" he said - even if he knew the person he was asking always ignored him and he had no empirical evidence his requests ever had an effect.

Hayes was diagnosed with mild Asperger's Syndrome -a form of autism - last month by medical experts as part of these proceedings. He was allowed to sit with his legal team and an independent intermediary, rather than in the glass-enclosed security dock where defendants more usually sit.

Judge Jeremy Cooke told the jury that Asperger's was a condition that meant people could often not detect shades of grey, tended to see the world in black and white and exhibit intense interest in things.

Hayes said he was obsessed with financial markets.

"I'm still obsessed with the financial market and I very, very much miss my old job .... it was a big part of my identity," he said. (Reporting by Kirstin Ridley; Editing by Susan Fenton)