Continental European policymakers reacted with surprise to the news that Northern Rock was being bailed out, suggesting the Bank of England had taken the decision to act without extensive consultation with its European partners. Many were particularly surprised, given the strong stance taken by Mervyn King, Bank governor, on providing liquidity to banks. On Wednesday, Mr King said the Bank would not engage in a bail-out of troubled institutions unless it had systemic implications. European Central Bank policymakers have indicated from the start of the crisis that it is imperative to provide as much liquidity as the market needs to...