In these febrile markets, secrecy is the enemy of confidence. The Bank of England provided £1.6 billion in emergency funds to Barclays, but, for a full working day, refused to allow it to explain its activities to the market. The decision to exact a vow of silence as the price of its assistance has added to anxiety in the financial markets and further dented the reputation of one of the best-known names in British banking.

Over the next few days, the truth of what has forced Barclays to turn to the lender of last resort not once but twice in the past month will come out. The bank insists that it has no liquidity problems – ie, that it is not, nor has it ever been, running out of cash. Instead, Barclays said last night that it turned to the Bank of England for money on Thursday evening because the computer system that it uses to settle trades on sterling crashed. It needed money to close out deals, unsighted, for one night. The bank’s systems automatically directed towards the Bank of England. Barclays says it had a technical problem. It now has a PR problem. But, in no way and at no time, has it had a funding problem.

Nonetheless, this raises some questions. Why was it just Barclays that found itself scrambling for funds? Why could Barclays not find lenders in the commercial market? And why was it that, if the Crest settlement system was to blame, other banks did not also go running to the Bank of England?

But Barclays is not the only financial institution with some explaining to do. The Bank of England is supposed to ensure stability in financial markets. In its handling of this episode, it has insisted on confidentiality at the expense of transparency and no one in the market has profited from that.

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