Alf Young on Tuesday: The tripartite memorandum of understanding between the Treasury, the Bank of England and the Financial Services Authority, governing who should be doing what in pursuit of financial stability, is dripping with warm, reassuring words.

The tripartite memorandum of understanding between the Treasury, the Bank of England and the Financial Services Authority, governing who should be doing what in pursuit of financial stability, is dripping with warm, reassuring words.

Clear accountability. Transparency. Avoidance of duplication. Regular information exchange. Nowhere does it suggest that, in a financial crisis, the three partners should throw their toys out of the pram and start playing the blame game.

But in the aftermath of the deeply-damaging retail run on Northern Rock, that appears to be precisely where we are at. The bank's governor, Mervyn King, stands accused of using an uncharacteristically expansive radio interview to pin the blame for not acting quicker in this crisis on the chancellor, Alistair Darling.

Treasury sources have reportedly dismissed King's remarks as "naive". MPs on the Treasury select committee are even hinting King's tenure as governor may now be on the line.

And while the government has promised, in this week's Queen's Speech, a bill to strengthen depositors' protection when a financial institution does get into trouble, the FSA is warning against knee-jerk legislation. "We've had, in this country, the Dangerous Dogs Act and, in the United States, Sarbanes Oxley. There is ample evidence that legislation made in haste can create significant harm," warned Thomas Huertas, the authority's head of wholesale and institutional markets, yesterday.

Were you to believe the racier accounts of the regulatory fall-out from Northern Rock, the only dangerous dogs around at the moment are a banker, a politician and a regulator, all snarling at each other over who messed up most over a Newcastle-based mortgage bank which over-reached itself and was then brought to earth by a global liquidity crisis which demonstrated just how extreme its business model really had been.

As I have suggested before, the primary responsibility for that mess rests with Northern Rock's board. And so far, only its chairman has paid with his job. But, of course, that does not absolve the regulatory authorities, if it can be shown they failed to respond when the warning signals appeared.

Much of the brouhaha over King's alleged attempt to pass the buck to the chancellor rests on his account of who did what when an unnamed bidder for Northern Rock, universally believed to be Lloyds TSB, signalled its terms to the authorities.

According to governor King, it wanted the Bank of England to lend it £30bn, at bank rate, for about two years.

The governor told Darling it was not something a central bank could do. It was a matter for government. And that, in terms of the memorandum of understanding, is exactly as it should be. It explicitly says: "Ultimate responsibility for authorisation of support operations in exceptional circumstances rests with the chancellor."

In any case, there is nothing in King's account to suggest that he wanted the chancellor to say yes. He claims he told Darling: "This is a matter for government, but you have to recognise that, if you were to make available such a facility to one bank, you would have to make it available to any other potential bidder and therefore it will become public."

It did not, King reflected, take the chancellor very long to recognise that "not only was this something which central banks don't do, it's also something governments don't do."

But if that part of the row looks a trifle overcooked, the dispute over who took the warning signals most seriously looks much more incendiary.

The governor insists he had made repeated warnings about the danger of liquidity in the system drying up. "One of the lessons for us in all this is that we need to find much more effective ways of making people listen when we flag risks in advance," he told the BBC.

But when that risk crystallised at Northern Rock's door and depositors did what King accepts was completely rational and queued up to take their savings out, the realisation that the UK authorities, unlike those in the United States, Canada and other countries, had had no power to take pre-emptive action clearly irked the governor.

"In some countries there is a system in which it's possible to intervene pre-emptively and take retail depositors out of the bank and transfer their accounts to another bank," he said in his BBC interview. "We don't have that power in Britain. We need it."

Instead, the authorities were left with the messier option of the Bank stepping in as lender of last resort and the chancellor offering a belated guarantee to all Northern Rock depositors that their money was safe. But how forcefully had the Bank and the FSA pressed government for that pre-emptive power? Are Treasury sources correct when they claim no one was ringing a loud warning bell?

That is the nub of this regulatory spat. Were there clear calls for intervention that were rebuffed by the Treasury? Or were all three players in this three-ringed regulatory circus caught on the hop? In short, were the warm words of the present memorandum of understanding just syrup, a key ingredient in any regulatory fudge?