The European Commission on Wednesday unveiled a draft plan to shift the cost of dealing with failing banks from taxpayers to the banks' stakeholders.

The plan, announced by Michel Barnier, the European Union (EU)'s internal market commissioner, suggested a "bail-in mechanism" that would give national regulators the power to force losses on shareholders and creditors and even order the breakup and sale of troubled banks.

"The financial crisis has cost taxpayers a lot of money," Barnier said at a press conference in Brussels.

"We must equip public authorities so that they can deal adequately with future bank crises. Otherwise citizens will once again be left to pay the bill, while the rescued banks continue as before knowing that they will be bailed out again," he added.

The cornerstone of the plan are rules forcing banks to pay into a so-called "resolution fund," which can be tapped to handle future bank failures. However, the rules would only take effect as of 2018 so that banks can have time to raise the extra capital, according to a statement by the European Commission.

Under the proposed legislation, European banks would be required to draw up "resolution plans" for "prevention and preparation," which need to set out how a bank can react as quickly as possible when it runs into trouble.

The proposals would also empower national authorities to intervene, including by firing the management staff, when the banks are on the verge of collapse. When preventive and early intervention fails, "resolution" will take place, said the Commission.

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