ALISTAIR Darling has said the Treasury will study proposals from the International Monetary Fund for a tax on banks to provide for poor countries and offer insurance against future financial crises.

However, the chancellor, attending the annual meetings of the IMF and World Bank in Istanbul, warned of practical difficulties and said such a tax would be rejected if it worked to Britain’s disadvantage.

Dominique Strauss-Kahn, the IMF’s managing director, aims to bring forward proposals for a worldwide bank tax. He told the meetings that a “Tobin tax” on financial transactions, favoured by Lord Turner, chairman of the Financial Services Authority, was not practicable.

A broader bank tax, with proceeds paid into a fund for international development and to be used to mitigate the effects of future crises, could work, he said. A team under John Lipsky, an IMF deputy managing director, is to work on it.

Darling’s preference has been to target the banks through higher capital requirements rather than new taxes. He conceded yesterday, however, that there was “high-level interest” in the idea.

Last week he struck a deal with Britain’s big banks to limit their bonus payments.

The chancellor also said that the G7, the group of leading advanced economies, would still have a role, despite the rise of the G20 as a larger rival body. He dismissed the idea of a smaller G4 to represent America, China, Japan and Europe.

Darling said the UK would not easily give up its permanent seat on the IMF. The UK would resist a shift in IMF voting rights to the big emerging economies greater than the 5% move agreed . G7 finance ministers and central bankers, meeting last night, welcomed signs of improvement in the global economy, but warned that downside risks persisted.

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