Adrian Hamilton: Brown's new role as the 'Supermac' of global finance

The Prime Minister is pushing barren remedies for the world's woes

Labour insiders have apparently taken to talking of the "Real Brown" and the "Real Brown Premiership" of the past month, to distinguish it from the "unreal" premiership whose star fell so ignominiously in his first year. That, of course, begs the question of just how different the new decisive, "make way-for-the man of experience" Brown is from the indecisive, endlessly inept Prime Minister of the last year. The leopard never changes its spots, nor a middle-aged man his character.

But the really intriguing thing about the new Brown is just how like Tony Blair he has become. Just as Blair seized the moment of 9/11 to cast himself as the international man of the moment, rushing to Washington to strike the note as America's friend and then jetting round the world to cement alliances in the new world of Terror, so Gordon Brown has grasped the moment of the credit crunch to run up his flag as redeemer of the global financial system and to race around the world to convert the rich and the poor to his cause.

There's no stopping the man. He flies to New York for the new UN session and uses the occasion to stamp his authority on the bankers. He gatecrashes the summit of members of the euro. He goes off around the Arab Gulf to sign up the oil rich sheiks to a new IMF bailout programme. Then it's off over the next week to another EU summit and the meeting for the G20 summoned by President Bush in Washington. Hold an international meeting and Gordon Brown is sure to be there.

Now the British PM does have a lot to congratulate himself on. The British package of guaranteeing loans between banks and taking direct shares in them has been widely copied. He genuinely cares for the deprived of the world, Africa in particular, and his attempts to boost the IMF's rescue funds is both sincere and noble. But it also has to be said that there is a lot of self-serving claims to authorship going on here, a process of opportunism that suggest that he still doesn't really understand what is happening in the world and is pushing barren remedies for its underlying woes.

His two great mantras are: first, that the present crisis has been entirely imported from the US through its sub-prime mortgage debt and, secondly, that it is a global crisis requiring a global response in reformed international institutions. It's a convenient interpretation because it absolves Brown as Chancellor from all responsibility for the current crisis in the UK, and from any direct share in regulatory failure of the banks.

But you can't blame all of Britain's present woes on American sub-prime mortgages, although they were a catalyst. The root of the problem has been the mushrooming of derivative financial instruments generally, and half of these were invented in London. Nor was the explosion in off-balance sheet financing the result of a failure of of international institutions to supervise them.

The failure of regulation was at national level, in the Bank of England and the Financial services Authority here as the regulatory authorities in the US. Brown as Chancellor allowed the growth of the new finance because it suited him (the provision of mortgages and consumer credit to the poor was fine by him) not because he lacked the instruments of control had he wished to use them.

The British Prime Minister's insistent call now for the development of global institution to regulate global finance is in many ways just a red herring. You can certainly improve the transparency of international money flows, although there is the BIS to do that. You can greatly increase the degree of co-operation and co-ordination of central banks and financial authorities.

But in the end the best and only effective way of regulation is through the supervision by authorities of the banks based and operating in their territory. Trying to make China, India, Brazil participate in a new authority in which everyone is going to be responsible for everything is not going to work. Why should they?

So much of the talk of global reform is simply a diversion from doing now what is needed with the instruments that are there. The banks do require tighter control in the future. But for the moment they need prodding in to lending more not less. The world could probably do with a new Bretton Woods agreement to better manage exchange rates and capital flows. But right now it needs more co-ordinated action to reflate the world's economies and keep the wheels of finance moving.

What it doesn't need is one more politician – be he Brown or Sarkozy or even the outgoing US President – cavorting round the international stage, claiming ownership of the future. We've been through that with Tony Blair, and look where it got us.

a.hamilton@independent.co.uk