Not the kind of bank run that you and I might normally think of, in which the retail depositors queue on the streets to get their money back, but a bank run nevertheless in which the wholesale funders, other banks or money market funds lending to Northern Rock. But they weren’t being bailed out because they were having to pay more for the money than if they had taken out the insurance beforehand, so those banks that had behaved prudently were not having to pay as much money for this special liquidity as the banks that really needed it and that facility was there for those banks that really needed the money. And I think that the lesson in this is that in recent years a number of banks - not all banks by any means - but a number of banks decided to grow quickly on the basis of this wholesale funding, from wherever they could find the money, and they didn’t think clearly about whether the liabilities they had to the people who provided the money could easily be matched by the sales of assets in which the money was invested and they were taking a risk. On the weekend before we granted the facility to Northern Rock, I was asked whether if a certain retail high street bank were to make an offer or a bid for Northern Rock whether we would be prepared to lend that bank 30 billion pounds, at the bank rate, for about 2 years. Read More