Brown plays down bank transaction tax

LONDON (Reuters) - Prime Minister Gordon Brown said on Tuesday banks must be made to act responsibly but that a levy on transactions was only one possible way of achieving this.

Brown had floated the idea of imposing such a tax at the G20 finance ministers summit last weekend, but has since played down the issue after the U.S. voiced strong opposition to it.

"I think if you read my speech on Saturday, what I was talking about was the social responsibility of financial institutions," Brown said at his regular news conference.

"And we've found also that in good times the banks achieve very high rewards and in bad times it has been the country, the nation's taxpayers as a whole, who have had to underpin the banking system," he added.

Britain has pumped billions of pounds into bailing out Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L).

Brown's calls for banks to give something back chime with comments from France and Germany, but the transaction levy has run into opposition.

"There should be a debate about a new contract between banks and the society they serve, it will have to be a debate conducted at a global level," Brown added.

"I mentioned four possible ways that we could do it -- an insurance levy, a resolution fund, contingent capital liabilities or a global levy."

"I don't think this debate can be avoided. I think this debate is fundamental to the future of banking."

IMF Managing-Director Dominique Strauss-Kahn told Reuters the IMF was exploring the idea of making banks pay insurance fees to fund any future rescues.