Amid the chaos and confusion that has accompanied the credit crisis at British bank Northern Rock, Bank of England Governor Mervyn King has remained tight-lipped. There was barely a word from him when the Bank, as Britain's lender of last resort, made emergency cash available to Northern Rock last week. When that triggered a run on the High Street lender, with customers lining up for days to take back their savings, King still failed to utter a word. And when the government finally stepped in Monday to offer a gilt-edge guarantee for spooked depositors in the form of cash, the silence was deafening.

Until late this week. Appearing before a committee of British M.P.s Thursday to explain the Bank's handling of the crisis — the first run on a U.K. lender in living memory — King finally opened up. The Governor, the bank's former chief economist and an academic who's taught at Cambridge, Harvard and MIT, first got wind of problems at Northern Rock on Aug. 14. The Newcastle-based bank — Britain's fifth-largest mortgage provider — leaned heavily on wholesale money markets to fund its own mortgage loans. When those inter-bank markets started to freeze up in recent weeks amid a global credit squeeze triggered by the subprime mortgage crunch, so too did the source of 75% of Northern Rock's funds. "At that point," King said, still hopeful the market would step in to help out the troubled bank, "there didn't seem much point in blowing up the train before it hit the buffers." ...

Full story: time.com