A banker, Mark Twain complained, is “a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain”. The behaviour of many institutions during the current credit crunch has done much to substantiate the American humorist’s cynical assessment. Those who have insisted that their humble customers “should not panic” have themselves been acting in a manner akin to Corporal Jones in Dad’s Army. It is this approach that has been principally responsible for the upheaval experienced by Northern Rock in the past few days. If a far more robust response is not forthcoming, others in the banking sector will suffer.

There are specific factors that left Northern Rock more exposed to international financial turbulence than most of its British competitors. The company has become the fifth-largest lender in the country but on the basis of a small number of high street branches. It raises the vast majority of its funds not from investors’ deposits but on wholesale money markets and through the sale of bonds based on its mortgage debts (asset-backed securities). It has marketed itself aggressively and has perhaps been more prepared to lend to the self-employed and those with unpredictable incomes than others. But it is emphatically not a Bank of Hicksville. Its profits will be down sharply this year and next, but they should still run into hundreds of millions of pounds. The Bank of England is assisting a business that has a short-term problem, not a short-term future.

This intervention has only become necessary because of the banking community’s inaction. Banks are making a crisis out of a drama by their refusal to lend money to each other, as is normal, and are showing little discrimination or responsibility, financial or social. Bodies that have been vocal advocates for their own “self-regulation” have collectively stood back and obliged central banks (and by implication central governments) to become the lenders of last resort. Central authorities have been forced to exhibit the degree of confidence in the banking system that the banks should have been capable of displaying in each other. It has been wise of the Bank of England and the Treasury to adopt the strategy they have, but once the current concerns triggered by dubious US mortgage lending ease, questions may be asked of rash banks who have shown little sense of judgment.

The paradox of this saga is that the larger global economy is not suffering from a shortage of liquidity. There has been enormous new wealth created in Asia with a subsequent thirst for investments in Europe and North America. The flow of money available may slow somewhat in the coming months but there is no rational reason why it should dry up. There will be a surplus of funds, not a shortage. Any adverse impact on the “real economy” should be modest unless the banks are so needlessly restrictive in their activities that more of them are damaged by adverse publicity as Northern Rock has been.

The sub-prime debacle is the cause for legitimate concern. It involves immensely complicated financial packages that are not fully understood even by some of the most sophisticated operators in this field. The irritating lack of clarity about who holds what amount of debt has led to some ridiculous underpricing of risk.

Yet the scale of these difficulties, even if the worst estimates are ultimately accurate, should not be such that the banking system itself is discredited. Customers have looked to the banks in vain for reassurance. These organisations need to show the financial maturity that they demand of those customers. Some supposedly responsible institutions have rushed to the exit with all the charm and grace of a panicky prepubescent. We will, in time, name and shame those banks.