A plan to end the "too big to fail" mentality across the banking world would see "systemically important" banks banned from drawing on taxpayer subsidies when their risks don't pay off.
The Financial Stability Board (FSB) has released a public consultation policy in which it proposes a minimum bond or equity buffer against risk-weighted assets as well as a supervisory global framework.
The FSB said the system will give the financial community confidence that banks can absorb their losses and don't have to draw on taxpayers in times of crisis.
"Once implemented, these agreements will play important roles in enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system," FSB chair Mark Carney said.
The pitch is expected to be discussed at the G20 summit in Brisbane this week.
