Given the rather cocky and aggressive investment strategy that landed Northern Rock in this position, I suppose we should expect a little chutzpah after the fall. Even with a government bail-out only someone with as big a brass neck as the chief shareholder in Northern Rock, an organisation called RAB Capital, could be quite as phlegmatic about where blame should lie. RAB's Chief Executive, Philip Richards, this week announced: "We believe that's been caused by the way the Bank of England handled the interbank market after the crisis broke in the summer."
The "that" in that last sentence is credit lines. And the genius business model that couldn't fail, based upon not actually lending your own money, but money that you borrow from someone else and call your own money. Given that all the other major banks have also sustained losses caused by the sudden tightening of credit, it seems everyone was borrowing from everyone else, under the economic principle of hubris: the greater fool theory. Presumably, therefore, to keep Mr Richards happy, the Bank of England should have "handled the situation" by lending everyone £24bn to keep the merry-go-round going.
I've been trying to work out what the difference is between "a short-term funding problem" and a pyramid scheme. Probably the difference between owing the bank £100 and £24,000,000,000.