An alliance representing a quarter of the European Parliament's MEPs, including Poul Nyrup Rasmussen, the driving force behind Europe's much-maligned hedge fund and private equity directive, has backed the introduction of a transaction tax, lending weight to a concept earlier mooted by Lord Adair Turner.

A group called the Europeans for Financial Reform held a meeting in Brussels yesterday, outlining its proposals for regulating global finance. Among the proposals was a call to introduce a financial transaction tax in a bid to stop speculation. Other measures include bringing transparency to the shadow banking system, and closing down tax havens.