The Banks are Fraudsters but who do we Prosecute?

Economics Political Theory
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(This thread is predicated on fractional reserve banking being fraudulent. This is not a thread to discuss whether or not this is the case; this can and is done elsewhere.)

As the question above- it seems to be a difficult one to discern. Who gets busted for it? The shareholders, the bank managers or the clerks? I must admit I haven’t read Kinsella yet on Causation and Liability but from what arguments I’ve heard I don’t believe LL to be an inherently wrong. My initial target would probably those employees who sanctioned loans funded by fractional reserves so probably the bank managers.

This came to mind after reading Kevin Dowd’s assesment and his programme for banking reform. (He’s a free banker btw)

http://www.libertarian.co.uk/lapubs/econn/econn111.pdf

On another note if we let the banks liquidate and go into recievership the demand deposits would be not be considered assets of the banks and thus all DDs should return forthwith to their owners before any debt settling takes place. Are there any problems with that? It’s just that Dowd being a Free Banker considers DDs as bank assets and wishes to use them as part of his banking reformation.

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You, me, we, the government, does not prosecute anyone unless they committed fraud. The market prosecutes failed companies using bankruptcy. You let these institutions declare bankruptcy and then let the court sell the assets and give what is left to the buyers who can better use them. Unfortunately the gov must also pay contracted insurance on deposits.