If that didn't seem a terribly illuminating contribution to the debate, Gordon Brown was at it again yesterday, using the Ottawa meeting of Commonwealth finance ministers to make the case for a "Standing Committee For Global Financial Regulation".
Apparently Mr Brown has been "a vocal advocate of reform of the world's financial architecture" for some time now. This comes as something of a surprise, since it is not immediately apparent that anyone, Mr Brown included, was advocating change on any level until the collapse of emerging markets came and hit them between the eyes. Leaving that aside, what does he mean by such a Standing Committee and what would it do?
This new monstrosity would apparently be a sort of millennium dome encompassing all three existing international organisations - the IMF, the World Bank and the Basle-based Bank for International Settlements - together with other, presumably national, regulatory bodies. This new umbrella organisation would then meet on a monthly basis to monitor markets and ensure that necessary international standards for regulation and supervision are put in place.
It is the job of politicians to respond to crises, and to introduce sufficient checks and balances to ensure they don't happen again, so we shouldn't mock too much. What makes this particularly crisis so difficult to deal with, moreover, is that, though it threatens to sink us all, it is nobody's problem in particular. Globalisation is a market-led process, which politicians have been powerless to control or interfere with. As a consequence, externally imposed solutions are hard to find.
More regulation, greater transparency, better early-warning systems - all these things plainly make sense, but there is an awful air of barn doors slamming after the horse has bolted about them. It is also not at all obvious what they would do to help the situation. Besides, there is something faintly hypocritical about it all. Who are we to lecture the Far East about the need for greater regulation when on our own doorstep the near collapse of Long Term Capital Management, an entirely unregulated hedge fund, came that close to plunging our own Western banking system into a crisis of Japanese proportions?
It doesn't suit the politicians now gathering for the annual meeting of the IMF in Washington to accept this, but our best hope is that markets learn from their mistakes and don't repeat them. Anything the politicians do will be just tinkering at the edges.
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