Bank insurance levy finds support at WEF

World’s leading bankers at the World Economic Forum in Davos have decided to support a new insurance

Led by Deutsche Bank, most major banks have agreed to back the idea, which the International Monetary Fund (IMF) has described as "practical". The levy would go into a fund to rescue banks in financial distress, instead of using taxpayers' money for the purpose.

The bank insurance levy was considered a more realistic option by bankers and politicians compared to the 'Tobin' tax proposed by France and the UK which did not find much support.

US President Barack Obama had earlier revealed plans to force banks to pay into a pool fund to provide compensation for a failing financial institution.

David Cameron and Chancellor Darling have both backed the plan.

The levy is among a number of options outlined by the IMF, which will be presented to G20 ministers in April.