Funnily enough this coincides with me starting to read the excellent book The Halo Effect by Philip M. Rosenzweig. I would describe it as kind of the management equivalent to Fooled By Randomness by Nassim Nicholas Taleb, it's about how we attribute outcomes to the wrong causes, particularly in retrospect. And bloody hell could it have been written specifically to describe some of the commentry around the Bank's actions.
For example this bit in today's Torygraph business section. First it massively simplifies what has occured - apparently King's u-turn can only be either in response to something nasty we don't know about, or because he was sat on by the Chancellor. Second it does the typical wonky thinking thing of projecting attributes, like so:
More than ever it looks like King has been reading from the wrong page of the regulatory manual, betraying his background as a clever academic when the situation required the gut feel of a banker.
A real banker, you see, wouldn't have changed his/her mind. They would already haven known the optimal response in advance. King in contrast is of course an academic who only makes decisions based on textbooks, and then changes his mind, or is forced to. Really, having begun reading The Halo Effect I could almost have written the Torygraph stuff myself. It's not "analysis", it's more like a fable - The Tale Of The Academic Who Couldn't Run A Central Bank In A Crisis.
The really odd thing about all this, if you think about it, is that a real full-on crisis has been averted. When the facts change, I change my mind. No-one was really expecting to see a run on Northern Rock, so the pre-existing approach had to change. Why is altering your approach when the situation changes a bad thing? And as for the accusation that the Bank should have acted quicker, well maybe. But maybe again that's just hindsight bias. We can only see what we think the best decision would have been in retrospect, and even then we can't see all the possibilities that other decisions would have created.
So personally I don't think the Bank has done a bad job.
And on that note here is Anatole Kaletsky's piece in the Times today, which is the counterpoint the Torygraph analysis.