Instead shareholders and creditors on both sides of the Atlantic would be forced to take the losses in the event of another banking crash the Daily Mail reports.
It marks a significant shift from the situation in which UK taxpayers stumped up billions to rescue stricken lenders such as Royal Bank of Scotland and Lloyds Banking Group.
It was also forced to bail out lenders Northern Rock, Bradford & Bingley and Alliance & Leicester.
Officials in the United Kingdom and United States have now drawn up plans to ensure that failed banks can be dealt with in future without taxpayer funds.
A single entity would exist in place of national bodies dealing with the subsidiaries of the financial firm in trouble in each separate country.
Paul Tucker, deputy governor for financial stability at the Bank of England, said: ‘The “too big to fail” problem simply must be cured. We believe it can be and that this joint paper provides evidence of the serious progress that is being made.’
The report by the Bank of England in the UK and Federal Deposit Insurance Corporation in the US says: ‘The financial crisis that began in late 2007 highlighted the shortcomings of the arrangements for handling the failure of large financial institutions that were in place on either side of the Atlantic.
‘Strategies have been designed to enable large and complex cross-border firms to be resolved without threatening financial stability and without putting public funds at risk.’
It will involve shareholders and creditors taking losses instead of taxpayers.
