New global rules to stop tax-payer bail-outs of banks are being formulated by global regulator the Financial Stability Board.
In future, big banks will have to hold more money in order to survive big losses while shareholders would be the first to suffer losses if banks could not pay from their own resources.
Mark Carney, governor of the Bank of England, called the plan a “watershed” moment, saying it had been "totally unfair" for taxpayers to bail out banks after the financial crisis of 2008 and 2009.
"Instead of having the public, governments, [and] the taxpayer rescue banks when things go wrong; the creditors of banks, the big institutions that hold the banks' debt - not the depositors - will become the new shareholders of banks if banks make mistakes."
Hundreds of billions were poured into banks “too big to fail” during the crisis, with the British taxpayer alone subsidising more than £1 trillion at the peak, according to the National Audit Office.
The capital set aside should be worth 15-20% of the bank's assets, the FSB said. That is a far bigger hedge against losses than currently required.
The FSB has published a list of 30 banks it regards as "systemically important", meaning their collapse could have a wider impact on global financial systems.
In the UK, they are Barclays, Standard Chartered, HSBC and the Royal Bank of Scotland.
Lloyds Banking Group has been removed from the list as its potential impact on financial systems has declined in recent years.
The proposed rules should come into force in 2019 after a period of consultation.
