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Peter Faye stood in the winding and disorganized line in London's financial district and could not believe it was happening to him. "All my savings are in Northern Rock," said the veteran lecturer, who retired a mere year ago, in a trembling voice. "I am planning to withdraw all my money from the bank, to the very last penny," he added angrily.

The primeval fear of losing all one's savings after one has become a pensioner who cannot return to the work force is one that plagues us all. A working person who saves every agora believes that when the time comes, he or she will be able to live respectably from the earnings saved. But now it seems that nothing is sure, everything is fragile.

A crisis that started in the United Sates because of the greediness of investors and speculators has crossed the ocean and is threatening the small saver in London - and the world over. And when this threat becomes concrete, even the cool-headed British lose their composure. The thousands of people who crowded outside the branches of Northern Rock were not listening to the promises of the bank's managers that their money was safe. They wanted to get it - and now. Even the usually orderly British line did not stand up to the pressure. When there is a panic, there is no line and no order. Indeed, the bank management was forced to call the police to establish order, as the bank doors threatened to give way from the push of clients.

The bank in question is a well-known mortgage bank, the fourth largest in the British Isles, which has been in business for 150 years. The bank started facing liquidity problems following the credit crunch that developed in the U.S. some two months ago. The liquidity problem became known to the general public when the bank was forced to ask for help from the Bank of England. And then the clients began streaming to Northern Rock branches to withdraw their savings before it was too late.

The governor of the Bank of England hastily intervened and started injecting large sums of cash into the bank, but that did not stop the panic. That is why the Chancellor of the Exchequer Alistair Darling intervened and made all the bank's deposits good as gold by declaring the British government would guarantee all its pledges. Thus, he stopped the panic. He was afraid that the panic would spread from Northern Rock to the entire British banking system, and there could be a general collapse. That is actually the task of every governor of a central bank - to prevent the crash of banks. The second important task of a governor is to maintain a low level of inflation and the growth of the economy.

This week it became clear to Ben Bernanke, the chairman of the Federal Reserve Board, that the American credit squeeze is posing a real threat to economic activity. So he brought down the interest rate sharply, by half a percentage point. The move was not aimed at the shares market; it is not the task of the central bank governor to prevent a decline in the prices on the bourse. Bernanke brought down the interest rate to prevent a recession. Now that the interest is lower, it is easier to borrow and to lend, and that is an injection of encouragement into activity in the American economy.

The current credit squeeze was sown during the days of Alan Greenspan, the previous Federal Reserve chair. Greenspan lowered the interest rate drastically after the 2001 attack on the Twin Towers, and left it very low (1 percent) for too long. The result was the establishment of foolhardy "hedge funds" that took giant loans so as to enter into dangerous and esoteric investments. The low interest rate enticed the general public into taking large loans to buy shares and apartments. In this way, two giant bubbles were created on the American market - the shares bubble and the real estate bubble. They had to burst.

There are those who believe that bringing down the interest rate has solved the crisis, and that from now on the markets will continue to rise. But it is not quite so simple. Even Bernanke and the British government together are not able to prevent a real process of price correction in a downward direction. They can merely moderate the process and reduce the damage, but they cannot prevent it.

True, in the 21st century there are strong bodies, such as the central banks, that intervene and prevent a crash of the 1929 type. But we cannot sleep quietly and believe that our savings are completely safe. Nothing is completely sure in this global world.

Peter Faye actually succeeded in taking his money out of the bank, but he will be obliged to invest it once again in the same banking system, which will never be completely impervious to bankruptcy.