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Darling: bank tax must go ahead

LONDON (Bloomberg) - Group of 20 nations should adopt a levy on banks even if the plan fails to get unanimous backing from all countries, UK Chancellor of the Exchequer Alistair Darling said.

"The more people in the better, but you could never get a decision where a country could simply veto it, otherwise you would never get any agreement," Darling said yesterday in an interview as he traveled by train to Worcester, central England, where he is campaigning before the May 6 election.

Finance ministers and central bankers from the world's biggest economies are due to gather in Washington this week to consider proposals from the International Monetary Fund on a tax on banks. Darling is seeking action that would appease voters following news that US regulators had filed charges against Goldman Sachs Group Inc. over fraud.

Banks in the UK should pay money "up front" toward the Financial Services Compensation Scheme, a program to cover savers' deposits, said Darling, who also wants an additional tax in which lenders would make a "wider contribution" to society. The money from that tax would be used to fund general government spending on schools, hospitals and other public services.

Darling said units of foreign banks operating in the UK should pay the tax and he would expect subsidiaries of British banks to make similar payments in other countries. France and the UK have backed the idea of a levy on banks, while Canada opposes it.

The IMF will recommend levies on financial companies' non- deposit liabilities or on profits and compensation to pay for bailouts, said officials with knowledge of the proposal to G20 nations.