The US Federal Deposit Insurance Corporation and the Bank of England
have released joint proposals to deal with G-SIFIs - globally active, systemically important financial institutions.
Such banks are sometimes called "too big to fail" and have been targeted by bank supervision reformers since the global financial crisis. Some 12 of the world's 28 designated G-SIFIs are based in either the US or the UK.
Regulators in both countries are also under pressure to show a future banking crisis can be headed off without expensive bail-outs by tax-payers.
The BoE's financial stability chief, Paul Tucker, said, in a statement: "The 'too big to fail' problem simply must be cured. We believe it can be."
The approach outlined by the FDIC and the BoE would aim to keep sound banks open and operating. It would give the two regulators sweeping "bank resolution" powers to manage troubled G-SIFIs.
The eventual regulatory patterns settled on by the two regulators are likely to heavily influence regulation elsewhere. However, most of the proposed powers are similar to powers already held by the Australian Prudential Regulation Authority to intervene in the management of a failing bank.
The resolution powers set out in the paper would include the ability to remove senior management and to take steps that could make the bank's shares worthless. Some debt could be converted into equity, a process known as "bail-in".
"In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover," the paper says.
Regulators could then take steps to shrink the bank's balance sheet, break the company up, and sell or close operations.