The Bank of England uptil now behaved as non-responsive to market calls for injection of liquidity. BOE should not forget that they are also somehow responsible for what has happened to Northern Rock. However if they haven't learned the lesson as yet, then they should be better prepared for a bigger problem than Northern Rock. May be Mr King thinks that he possess a better judgement of market behaviour than FED and ECB, unfortunately he is wrong here. If even now he is not prepared to respond swiftly on market calls for sufficient liquidity, than it can only be a miracle that no other bank in UK falls from eclipse. Mr King please wake up from your dream world and for god sake act like a central Bank's chief and not like an arrogant beaurocrat.

Jamal Gurwara, London, Essex

"The European Central Bank offered €15 billion for auction and 44 banks applyed (sic) for €65.8 billion. "

Given the above how can anyone deny the existence of a severe liquidity squeeze if not a panic.

J Robin, Paris, France

Mervyn King is a good Banker i thought, and i hope mr King will
not just conseder few bankers, but taking in to consideration
whole of the banking system, once again?

Cllr Ken Tiwari (Independent), oxford , United Kingdom

I hope the BoE doesn't take the panic-stations option followed by the Fed! The problems caused by the credit crunch have just began. The BoE should keep its powder dry as worse days are to come!

Costas, Cyprus,

The finance sector has been behaving like a drunk on payday for the last decade or more.

Now they expect the rest of the population to bail them out.

How very dare they?

Let a few go to the wall pour encourager les autres.

nigel foster, Ryde, UK

Have you heard yourselves..........straw man arguments..........based on little or no authority! I'm no lover of banks but have a distaste for poorely put together arguments.

paul, Liverpool, UK

You seem reluctant to publish letters asking to know which banks are bidding for these emergency funds, how much each is after and for what exact purpose they need it.
With the last two BofE emergency offers being oversubscribed between 5 and 3 times there must be some desperate banks out there and we depositors need to know what is going on.

AWilliams, Cradley Heath,

I only have a few dumb questions.

(a) What has actually gone wrong - which seems to be something very serious - that the central banks are pouring taxpayers money on these financial institutions who seem to have caused the problem?
(b) Why are HSBC and others now reporting so-called write-downs and why not earlier? What happens if and when the borrowers start to pay up finally?
(c) How many end-game borrowers such as individuals or organisations that borrowed the money actually stated that they are going belly-up?

Jagadish, Bromley, UK

I expect all these holier than thou savers all work for companies who need to sell goods or services. If we all stuck our money in the bank they would now be drawing the dole.They should all be asked to fly to Darfur to educate the children of the forgotten on how to build up a tidy nest egg

Brian Griffiths, Ipswich, ENGLAND

Alan Routledge et al are correct. At present any " prudent" savings are losing real value as inflation ( which for most people is running close to 10%) erodes their value. Pre tax savings rates of 15% would be needed to give a fair return for savers.
But our corrupt financial institutions would rather make the savers suffer whilst dabbling in Mickey Mouse securities, paying their execs obscene wages, and letting a compromised BoE bail them out using vast sums of taxpayers money (much of it obtained from the very savers who are being robbed).
Eventually, the markets have a way of dealing with hubris like this, and there is every sign that it is starting to happen.
The Treasury should start by taxing the borrowings of the BTL brigade. And the BoE should be mindful of its mandate to control inflation. They wont of course. Corruption, greed, dishonesty and stupidity are too entrenched in the system. Nemesis will have to sort it out.

Tony Peterson, Kendal,

Is there one single person that realised the dangers inherent in the financial system before the credit crunch? How can share holders in the financial institutions still support the bonus payments that have been paid out? There is not a single expert amongst them. They built a house of cards, collected their rewards and are now waiting for the central banks to rescue them.

Actually, there was one, Warren Buffett, no wonder he is now the richest person in the world. It must be like taking candy off a baby, when the competition is so poor. He warned of the dangers of complex financial instruments many years ago, but was ignored.

The biggest fool of them all, and there is a lot of stiff competition, is Alan Greenspan. He even now does not realise his contribution to this epic global financial disaster.

Keith, Ashford,

I am a bit nervous, I have just been approved for a HBOS mortgage. I am prepared for them to withdraw it and loose the house I am buying. All my family say will be OK but I have my doubts.

Dave, London,

Throwing money at inefficient financial institutions is not the answer and the Governor should know better,just look at the mess he made of Northern Rock.
Interest rates should be increased dramatically to reward savers and thrifty individuals instead of careless negligent persons living beyond their means and keeping these feeble institutions in business.
We need a few useless banks and building societies to go to the wall to rid the industry of leeches.Throwing money at them is negligent.

alan routledge, chester, england

Stability will return once the banks stop ripping off their customers for every single penny - where are the billions they have made over the years - they have nothing put aside for a rainy day. They have bled their customers dry and killed the goose which laid the golden egg. Where is their lauded business model now. They are not even passing on rate cuts now which is creating a vicious circle so that even more homes will be repossessed leading to more bank losses. People do not have an endless pot of money or did they not realise this. So what if you provide a value for money service and make less profit at least you will have a bank for the long term. now

Harry, warwick, uk

Banks should put the interest up to savers to get additional funds 10 or 15% also put up the interest for credit cards etc.
Savers should get a better deal!

P M Carr, Lanchester, UK

Until the BoE gets assurity from the very Banks that were in part responsible for the Credit Crisis situation, that they (Banks) will not revert to underwriting through their own networks 125% +mortgages, and issuing Credit Cards like confetti which all makes 'everyone' the the western world think that credit is a never ending pipeline.... the BoE should stay pat. Can the BoE get it in writing that Banks will not fuel out of control inflation and a major inbalance in the housing market? Can the 5 big banks get assurity that the BoE will not play yes minister with Gordo (got it wrong) Brown and allow him to push the markets into false GDP (we are all doing very well) just so he can retain his backside in No10 long enough for his term of office to not be more of a joke than it already is.

Can they trust each other?

Can they?

Paul, London, Canada

This looks as if they know something that we savers dont!!!!

Matt, Napoli, Italy

This is a leverage problem. A $100 billion default on subprime loans was the catalyst but the real and fundemental problem is with the exotic debt and credit instruments that these mortgage backed loans supposedly underpinned.
There are over 10,000 hedge funds and fund of funds worldwide. Most are leveraged by between 20 to 100 times using mortgage backed security as collateral. The banks who lent them money to get into these leveraged positions now want it back. To do so across the board will cause market melt down so they are all in a catch 22 situation.
Watch this space.

John Betts, Swindon, UK

The BoE, UK government and ECB simply do not "get" this yet.

They need to ditch their tired old mantras about "moral hazard" and inflation worries. These issues are dead and buried for the moment.

When you see your neighbour's house on fire, even if he started it himself, you don't sit back and do nothing. You help him put the fire out, before it reaches your house.

Only large scale co-ordinated efforts by the central banks (BoE/ECB etc), governments, and main banks will stabilise this situation.

Banks need to start lending to each other again; to do this they need to be given a guarantee by BoE/ECB et al that their funding etc will be underwritten. This means BoE et al need to be imaginative, as the Fed and US government has been.

The trouble is, they are simply not up to the job.

Ken Frost, London,