It’s a serious question. We are set to hear a lot of words on this as Gordon Brown jets to New York tomorrow to discuss international financial regulation. “Supervision can no longer be national, it has to be global,” he has just said in his speech.

But how will a global regulatory monolith - based in Tokyo, or Wall Street for example - be able to monitor financial services more effectively than a national one?

Mr Brown will argue that financial markets are now more interconnected than ever before. A regulator in one country, for example the FSA, needs to communicate with those monitoring different arms of the same businesses in other markets. Fair enough.

Yet it seems very much as though he is simply trying to distract people from the failings of the British authorities.  

In my last job - the FT’s property correspondent - I met a 20-something salesman from Leeds who, on a salary of about £25k a year, had been lent £4m to purchase nearly 20 buy-to-let properties over a period of two years (he is now bankrupt). Just one example of Britain’s absolute failure to prevent ridiculous lending practices during the bubble years.

How, exactly, would a global regulator be better placed to spot this kind of thing?

Last week was the week in which the “world spun on its axis,” says the prime minister. Except it does day in day out.

And did I just hear him use the phrase “Servants of the People”? An expression famously used by Tony Blair in the late 1990s (and the title of an excellent book) but rapidly discredited as nonsense.

Gordon Brown has just punched David Cameron well below the belt in the opening remarks of his setpiece Labour speech.

Some people had urged him to let his kids appear in magazines, he said:”My children aren’t props: they’re people.” An obvious dig at the Tory leader.

Meanwhile: My colleague Alex - who is analysing the speech - is no doubt counting how many times Brown uses the adjective “serious”.

So far - the PM has only been going a few minutes - he has said: “People who say I’m too serious, quite honestly, there is a lot to be serious about. I’m serious about doing a serious job.” Expect more of this in the coming hour.

Gordon Brown has been basking in the credit taken for the temporary ban on City short-sellers.

No matter that a] the FSA denies that he had any influence over the decison whatsoever and b] the collapse in share prices was more due to institutions dumping stock than hedge funds short-selling (less than 5 per cent of HBOS was being shorted last week, compared to 30-40 per cent for some retailers).

Has the measure had much impact several days later? Not necessarily. This morning bank stocks have tumbled. Lloyds TSB was down 8 per cent when I last looked.

Analysts say this is mainly due to question marks over the US bail-out. But it also suggests that Friday’s rally may have owed little to the FSA short-selling move.

Did you feel it? The Labour balance of power shifted this morning. With his interview in The Times, Alan Johnson put the brakes on a coup (well, at least for a few months) while lifting the sights of Labour activists to a time without Browns, Straws, Blairs, Clarkes or Johnsons. He put his own ambitions aside (if they ever existed) and all but anointed David Milliband to lead the party into a new era (of opposition?). He made a plea for stability and unity, while taking a bow and reaching to close the curtain on a generation of Labour leaders. Few politicians could have managed to deliver this difficult message with such poise, or indeed with the candidness to make it believable. But there was also an ultimatum for Gordon Brown: we’ll give you time, he said, but you have to sort out your team and call off the dogs. Will the prime minister accept the terms of the truce? Here are Johnson’s words in full:

“If there are people briefing different ways from No 10, that needs to be tackled and Gordon needs to rein them in . . . That has got to stop. The Brownites versus the Blairites is just so boring, it is so last century.”    

“I don’t know what these people are doing but anyone looking at David Miliband sees a very, very good, competent politician who is part of our solution to these problems not part of the problems themselves.”

Here is Chris Giles‘ shrewd take on the Bank’s analysis of the dramatic fall in sterling. The MPC came to no conclusion over the cause, but it certainly did not rule out chronic indecision at the heart of government.

An increasing number of economists think sterling’s decline represents a global lack of confidence in Britain and its paralysed policymakers rather than a beneficial move to changed economic or interest rate expectations.

Recognising that the extent of sterling’s fall could not easily be explained, the Bank’s monetary policy committee discussed the phenomenon at its September meeting. Members accepted that it was likely to be either because of a “net shift in global demand away from UK producers” or “perhaps because of a rise in the relative uncertainty about short-term macroeconomic prospects or about policymakers’ likely responses”. Perhaps fittingly, the committee could not decide which.

His upsum of the economic pressures bearing down on ministers is well worth a read, although it is not for the faint hearted. Will Gordon Brown and Alistair Darling rise to the challenge?

For ministers the choice is horrible. They can try to muddle through, insisting the slowdown is just cyclical, so in time the economy and public finances will recover. That might seem the easy option, but it risks appearing out of touch and could further undermine international confidence in the UK and sterling. Mr King fired a shot across ministers’ bows last week. The long-term risk, he said, was that a failure of public finances to add up “undermines the market’s belief in the credibility of both the monetary and the fiscal frameworks. That will make our life more difficult.”

Alternatively, Mr Darling could accept that the economy and public finances will be persistently weaker than thought and seek to repair the damage with a programme of spending restraint and tax increases. If so, it would be a repeat of the two swingeing Budgets of 1993, which saw big rises in taxes and duties. These helped reverse a spiral of government debt. But they also helped seal the fate of the then Conservative government.

In any other circumstances today’s bank merger would not be passed by the competition authorities.

Rightly, Gordon Brown has decided that financial stability - in this case - trumps competition.

But there is something bizarre about his insistence that the new entity, with 28 per cent of the mortgage market, will “expand” to become an even more dominant entity. Strange times indeed.

Is Gordon Brown telling Lloyds to weaken its lending standards? Speaking on Sky, the prime minister just said: “We’ve also insisted on assurances from the new company [Lloyds/HBOS] about their mortgage lending in the market place so they will not reduce it. They say they will expand it and it will remain a very high share of lending in the market place and I think that was the right thing to do as well.”

Lloyds of course was in a position to take over HBOS because it had been more prudent and conservative through the boom, while HBOS by comparison let its hair down.

What assurance could Lloyds have given Mr Brown? Did they promise to renew all those questionable mortgages — such as buy-to-let and self-cert — that now look like financial madness?  When their mortgages come up, will they help out all the subprime borrowers with rapidly falling equity that HBOS threw money at? If not, Mr Brown’s promise makes no sense.

UPDATE: So Gordon Brown misspoke, it appears. His spokesman explained that “there was not any sort of deal. He was referring to what the bank themselves said.” Hmm.