My criticism of this view is that the proof is probably there, but the agencies responsible for obtaining it are likely corrupted as well. I'm not well versed in the intricacies of EU banking, besides the IMF/World Bank, but at least in the States, a good example of regulatory capture and corruption is the SEC.
It's not that the proof isn't there, it's that the SEC itself has become corrupted by the people it's supposed to enforce laws against.
On a side note, I am still livid about the Libor scandal. Why the hell is a rate set in London allowed to influence the American dollar so greatly?!
My understanding is that the purpose of LIBOR is to be free of US regulations on interest-rate setting and be closer to a 'free market' rate on the USD. The irony of the situation is left as an exercise to the reader.
London is also a bit more reluctant to clamp down on finance--they are the only region doing well in a struggling England, and unlike, say, the NYC finance industry, much of the money in London is free to go somewhere else.
> Why the hell is a rate set in London allowed to influence the American dollar so greatly?!
Because banks are not independent from each other, and they frequently borrow from each other if they lack a certain quantity of a certain currency.
The problem with the Libor scandal is that the bankers conspired to set interest rates by gaming the blind process they have for coming up with those rates in a fair way (all vote, top 4 and bottom 4 bids are removed, rest is averaged).
This is true, undeniable banking conspiracy at work. And governments still trust them with our money.
It's not that the proof isn't there, it's that the SEC itself has become corrupted by the people it's supposed to enforce laws against.
On a side note, I am still livid about the Libor scandal. Why the hell is a rate set in London allowed to influence the American dollar so greatly?!