UK floats bank levy, G20 launches imbalances framework

By Sumeet Desai and Anna Willard

ST ANDREWS (Reuters) - Britain pressed the G20 on Saturday to come up with a plan to make banks pay for any future bailouts but one idea of imposing a global financial transactions tax was immediately shot down by the United States.

Meeting for the third time this year, Group of 20 finance ministers and central bankers made little progress on a deal on the cost of climate change after heated exchanges that did not bode well for next month's environmental summit in Copenhagen.

They did, however, launch a new framework aimed at rebalancing the global economy, committing to present detailed economic plans for each other to check by the end of January 2010 to ensure better policy coordination.

And they agreed it was too early to pull the plug on emergency economic support packages because the recovery from the global recession was uneven and dependent on ultra-low interest rates and the trillions of dollars thrown at the problem.

"We are not out of the woods yet," British finance minister and meeting host Alistair Darling said when the meeting ended.

While most of the conclusions had been widely expected, British Prime Minister Gordon Brown produced the day's biggest surprise, saying there was an urgent need for the G20 to look at existing proposals to impose a levy on financial institutions.

"We should discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society," Brown said.

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