Britain should be proud to have a Prime Minister who commands new attention on the world stage after his daring rescue of British banks. Gordon Brown is right to say that reforms will be needed to the global financial architecture – an area he has thought a great deal about. But urging finance ministers to implement complex proposals by Christmas – an arbitrary deadline – is dangerous. It would be better to take the time to come up with the right shopping list, with fewer items on it. As Mr Brown should have learnt by now, rules implemented in haste are usually repented of at leisure.

Mr Brown wants a “global early warning system” to identify future risks to global economic and financial stability. But we already have one. In the past few years, many of the institutions he mentions – including the IMF, European Central Bank and Financial Stability Forum – have written earnest reports warning the world of the risks posed by securitisation, falling capital ratios, unregulated hedge funds and so on. The problem was that few people wanted to listen. Governments, including the British Government, were having too much fun spending the tax proceeds of the credit boom, which was stoked by low interest rates. The man who proclaimed an end to boom and bust was not keen to hear warnings of bust. More formal reporting of risks to ministers may help, but they will not address the global imbalances, which have fuelled this crisis.

That is not to say there is no problem. Capital now flows freely around the world – and in the past few weeks we have seen fear chase capital into every corner of the globe, from Iceland to Tokyo. This has devastated stock markets and livelihoods. We have global financial markets, but primarily national and regional regulation.

Mr Brown wants national regulators to coordinate their work and to place each of the world’s top 30 banks under coordinated supervision. I would put more faith in this idea were it not for the woeful failure of Britain’s own Financial Services Authority, the regulator of the world’s top financial centre, to provide proper supervision. In the past few years the FSA has been staring at corners of the jigsaw – asking firms to fill in forms about money laundering, and “stress-testing” for bad weather conditions – rather than piecing together the picture on the box. Mr Brown’s bank rescue was necessitated in part by the total failure of his regulators. There must be reform at a national level as well as in a global superstructure.

Right now, the greatest risk is of a global recession. Mr Brown is rightly concerned to mitigate that risk. But the priorities should be coordinated cuts in interest rates and reopening trade negotiations. Changes to financial regulation are important – in the longer term. But strengthening the IMF will take calm thought and consensus-building, not hyperactivity. At home, there remain many unanswered questions about the details of the Government’s rescue package, not least what the Treasury means by urging banks to return to lending at 2007 levels.

Mr Brown’s priority should be to fine-tune on the home front, especially given that his rescue plan is becoming an international model. With bank shares falling, that really does need hyperactivity. He should then move to fine-tuning the IMF at leisure.

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