UK joins G20 push for world levy on banks

By Sumeet Desai and Huw Jones

ST ANDREWS, Scotland (Reuters) - Britain threw its weight on Saturday behind proposals to impose a global levy on banks to fund future bailouts but failed to make much progress on securing a G20 deal to meet the cost of climate change.

Finance ministers and central bankers from the Group of 20, did commit, however, to a timetable for a new system of keeping an eye on each others' economies that would see countries present national and regional plans by the end of January.

They also agreed it was too early to pull the plug on the economic life-support packages in place as the global recovery was still uneven and dependent on ultra-low interest rates and the billions of dollars thrown into economies everywhere.

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

British Prime Minister Gordon Brown urged the G20 meeting -- the third this year and being held in St Andrews, Scotland -- to consider the bank bailout fund urgently. France and Germany have been in favour for some time of looking at a levy but London with its huge financial centre has always resisted.

Brown's Labour government, however, is trailing in opinion polls before an election expected in May and footing a multi-billion dollar bill for bailing out the banks at a time of huge public anger against bankers for their role in the crisis.

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

"There have been proposals for an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global transaction levy," he said.