WORLD> Europe
Britain urges steps to insure financial system
(Agencies)
Updated: 2009-11-07 21:10

ST. ANDREWS, Scotland: Britain called Saturday for consideration of a tax on financial transactions to insure against another crisis and urged world finance officials meeting in Scotland to agree on bearing the cost of fighting climate change.

Britain urges steps to insure financial system
British Treasury chief Alistair Darling, Left, walks with an unidentified official at the venue of the G20 Finance Ministers meeting in St. Andrews, Scotland Saturday Nov. 7, 2009. Rifts among the world's top financial ministers and central bankers from the Group of 20 rich and developing nations, are reported to be threatening attempts to secure future global growth and break a deadlock over the cost of fighting climate change. [Agencies] 

British Prime Minister Gordon Brown told finance ministers from the Group of 20 rich and developing it was time to consider a form of global financial levy such as an insurance fee on transactions or contingent capital arrangements.

Brown, the meeting's host, said it was time "to discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society."

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But he said Britain would not act alone, and that any measures must be implemented by all major financial centers and should reinforce existing measures to enhance the stability of the international financial system.

The meeting at St. Andrews in Scotland is Britain's last as host, and Britain has used it to advance issues it views as critical to future world economic growth.

Brown's comments bolster earlier calls from former German Finance Minister Peer Steinbruck for a global tax on all cross-border financial transactions.

Critics argue that measures such as the so-called Tobin tax — a flat tax on currency transactions named after the Nobel Prize laureate James Tobin — can dry up world liquidity.

Supporters suggest they could protect countries from spillovers of financial crises and possibly assist poorer countries in the battle against climate change — another issue being pushed by Britain at the gathering in the university and golfing town of St. Andrews in northeast Scotland.

Treasury chief Alistair Darling urged the officials to reach an agreement on bearing the cost of fighting climate change before a UN summit on global warming next month.

Darling said officials need to agree on a finance package to help poorer nations develop green industries and adapt to climate change.

"I think that it really is imperative that when we reach the end of the day, that we have shown that we have made some real progress in dealing with what is a very real and urgent problem now," Darling said. "We will do everything that we can to reach that agreement in advance of the Copenhagen meeting."

There have been disagreements about which forum was the most appropriate place to discuss funding to fight climate change.

The push to put it on the agenda here reflects concern that nations will fail to agree in Copenhagen on Dec. 6 on a successor to the Kyoto treaty limiting carbon emissions.

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