6  All speeches are available online at www.bankofengland.co.uk/speeches  6  On a personal note, I will greatly miss your deep technical expertise, open-mindedness, wisdom, good humour and friendship. Today isn’t really goodbye but au revoir. Because, whether it is the financial system or as colleagues, we know the future will be better if we stay connected. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7
But fire services do not offer free insurance for people who smoke in bed or set fire to their own house, thereby encouraging them to take risks that endanger others. When it became clear that Northern Rock could not find funding elsewhere, it came to the tripartite authorities (FSA, Treasury and Bank) to seek financial support from the Bank of England. Rather than stabilise the situation, the actions of the authorities seemed, at least initially, to fan the flames. There are lessons for us to learn. And I will come to those in a minute. But let me return to the queues of depositors. Here is an extract from a local newspaper: “By noon on Friday, more than 40 … customers … were waiting in line at the branch … waiting upward of an hour and a half to withdraw money from their accounts.” “Anxious depositors clutching withdrawal slips filled the offices for a second straight day. … The company placed extra chairs in a waiting area and asked customers to write their names on a sign-in sheet.” This wasn’t Newcastle or London. It was Los Angeles on August 17 and 18. The bank experiencing the run was not Northern Rock but Countrywide, a US mortgage bank. It is a Tale of Two Banks – banks of similar sizes and facing similar difficulties with funding – just a few weeks apart. Like Northern Rock, Countrywide took risks and relied on short-term funding from investors. But the similarity ends there. There were two significant differences.