LONDON, England (AP) — The Bank of England will inject funds into the longer-term money market, it said, marking a major U-turn in its policy on bailing out struggling banks and fueling accusations that British authorities have mishandled the credit crisis. Just a week ago, Governor Mervyn King warned against such a move because it "encourages herd behavior and increases the intensity of future crises," but analysts said if made earlier, the injection could have eased pressure on institutions like Northern Rock. After the bank’s initial silence on the credit crisis and its apparent failure to anticipate that its announcement of an emergency loan to mortgage lender Northern Rock on Friday would spark panic withdrawals, its belated intervention in the three-month money market has put King’s credibility on the line. Federal Reserve and the European Central Bank pumped billions of dollars into money markets when they first froze up in August, the Bank of England remained silent until two weeks ago, when it offered to inject an extra 4. read more
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