A group of five global markets associations has written to G20 finance ministers who are meeting in Washington, urging them to oppose the European Commission's plans to impose a financial transactions tax (FTT).

The letter is signed by the London-based Global Financial Markets Association along with the Japan Securities Dealers Association, Australian Financial Markets Association, Investment Industry Association of Canada and Korea Financial Investment Association.

The group states that the FTT 'would have unprecedented extraterritorial impacts, contrary to G20 principles, and, as even the European Commission estimates, will harm economic growth at a time of significant economic uncertainty'.

They maintain that the proposed levy of 0.1% on financial transactions and 0.01% on derivatives 'goes against the norm for international tax law', and say the plans are also inconsistent with the G20's stated goal of minimising 'negative spillovers on other countries of policies implemented for domestic purposes'.

The letter warns that implementing the FTT will result in increases in the cost of equity and debt financing for governments and businesses and make it harder for the global economy to recover. It states: 'Now is not the time to experiment with policies that will fragment markets, increase market volatility, harm savings and impede growth.'

Eleven EU countries, including Germany and Italy, have signed up to the FTT and EU officials have said they want the tax to apply across the single market.