Speaking to Prospect magazine, Lord Turner endorsed the idea of a levy on transactions that would reduce banks’ profits and the money available for bonuses.

Lord Turner said: ‘If you want to stop excessive pay in a swollen financial sector you have to reduce the size of that sector or apply special taxes to pre-remuneration profit.’

He added that he thought the introduction of this tax would act as a ‘nice sensible source for funding global public goods’.

The FSA is due to introduce new rules in January on financial firms’ remuneration policies to ensure that bank bonuses aren’t guaranteed for more than a year, and senior employees will have their bonuses averaged out over three years.

In addition to his FSA position, Lord Turner has previously held senior positions at both Merrill Lynch and Standard Chartered.