Mark Carney: No more bank bail-outs Meanwhile, large banks are still believed to enjoy a "Too Big To Fail" subsidy, meaning those that lend to them assume their money will be safe even if the bank fails because of government support. The FSB said this increases government borrowing costs and gives those banks a funding advantage against smaller ones. Under the new so-called "bail in" rules, globally systemic banks will have to hold "total loss absorbing capacity" [TLAC] - equity or debt that can be converted into shares - of at least 16-20pc of their assets, weighted for risk. They will also have to hold an additional layer based on how important they are deemed to be to the financial system, and to avoid banks underplaying how risky their loans are, their TLAC must be at least double the global standard for the leverage ratio - a measure of capital that does not take into account risk. The current Basel minimum leverage ratio is 3pc. In the most punitive scenario, banks will have to hold a buffer of 25pc of their loan book. The UK's four systemic banks are HSBC, Barclays, RBS and Standard Chartered and there are 30 worldwide, although those in emerging markets would not at first be held to the same standards. It is estimated that banks in Europe will have to raise up to €500bn (£393bn) in bonds to comply. Estimated size of implicit subsidy (Bank of England) If a bank fails, its creditors will then see the money owed to them turned into shares. This means that they, rather than taxpayers, are the support in the event of a bank suffering heavy losses. However, ending public subsidies could mean higher costs for customers, the FSB said. "G-SIBs [globally-systemically-important banks] may pass on a share of their higher funding costs to their clients, prompting a shift of banking activities to other banks without necessarily reducing the amount of activity," the regulator said in its draft proposals, to be discussed by the G20 at a meeting in Brisbane this week. Alternatively, G-SIB dividends and other distributions, such as employee remuneration, might fall. Douglas Flint, the chairman of HSBC, has said that bail-in rules will still mean the public being on the hook for banks. "These are about distributing the burden of failure; they are not about avoiding the burden of failure," he told the House of Lords last month. At the end of the day, the burden of failure rests with society. Whether you take it out of society's future income through taxation or whether you take it out through their pensions or savings, society is bearing the cost. Anthony Browne, the chief executive of banking lobby group the BBA, welcomed the proposals. "The banking industry strongly supports this work, which is a really important step in ending "too big to fail" and ensuring that never again will taxpayers have to step in to bail out banks," Mr Browne said. Mr Carney said on Monday: "Agreement on proposals for a common international standard on total loss-absorbing capacity for [globally-systemic institutions] is a watershed in ending 'too big to fail' for banks." The proposals will now be consulted on with responses due by the end of February. Final plans are due to be agreed on by the G20 next year and must be implemented by banks by 2019.