Government Interest in LIBOR Scandal?

Government Interest in LIBOR Scandal?
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As a citizen, I have a political question that I hope some independent financial expert can answer. In the LIBOR scandal we have heard about an interest that leading banks have in misstating the rates they were actually paying for overnight money. But what about the regulators? Were they simply befuddled? Lied to? Staffed, and thus "captured," by allies of past or future employees of banks? Closing their eyes lest they crash the system?

Or whatever else may be true, did the governments of which the regulators are a part have an interest served by fraud committed by banks? For example, to what extent, if at all, does LIBOR indirectly affect interest paid on government bonds?

If the governments had (and have) an interest parallel to that of the banks, how can we obtain a fair investigation. one that ends in something other than relatively limited "cost of doing business" fines, non-liability agreements, and Congressional tut-tutting?

Like nearly all citizens, I am not a financial expert, but we deserve a factual explanation of a possible conflict of interest on the part of governments in the LIBOR scandal, if it exists. And if not, an explanation of why regulators are failing to act, to the extent they are -- or are prevented from -- acting by legislative decisions.

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