THE International Monetary Fund (IMF) is considering plans for an "excess profits tax" on banks worldwide to raise cash in the wake of the financial crisis, it was reported today.

The IMF is expected to recommend the tax to sit alongside a global levy on bank balance sheets as the grip tightens on the sector following the mammoth bail-outs seen during the meltdown, according to The Daily Telegraph.

An excess profits tax would effectively act as a charge on bank cashflow - thought to be a way to raise significant amounts from banks without distorting the financial system.

It is thought the IMF will put forward its tax plans in a report to be published at its spring meetings later this month.

Chancellor Alistair Darling has confirmed his support for a tax on banks in recent weeks, but has stressed the need for an international solution.