The head of Britain’s City watchdog supports the idea of new global taxes on financial transactions, warning that a 'swollen' financial sector paying excessive salaries has grown too big for society.

Adair Turner, chairman of the Financial Services Authority, says the debate on bankers’ bonuses has become a “populist diversion” and that more drastic measures may be needed to cut the financial sector down to size.

He also says the FSA should 'be very, very wary of seeing the competitiveness of London as a major aim', claiming the City has become a destabilising factor in the British economy.

Financial Times