The U.S. government unveiled a plan Thursday to require banks to apply stronger international standards for their capital reserves and liquidity, aiming at preventing any future financial crisis.

The Treasury Department released a 14-page outline for Secretary Timothy Geithner to discuss the U.S. proposals during two days of meetings in London among the Group of 20 nations that begin Friday.

The proposal requires higher capital cushions and liquidity standards for banking firms deemed to pose a threat to the overall stability of the financial system.

According to the Treasury Department's statement, the global regulatory framework failed to prevent the build-up of risk in the financial system in the years leading up to the recent crisis. Major financial institutions around the world had reserves and capital buffers that were too low; used excessive amounts of leverage to finance their operations; and relied too much on unstable, short-term funding sources.

The resulting distress, failures, and government bailouts of these firms imposed unacceptable costs on individuals and businesses around the world, the department said.

"Today the Treasury Department set forth the core principles that should guide reform of the international regulatory capital and liquidity framework to better protect the safety and soundness of individual banking firms and the stability of the global financial system and economy," said the statement.

Geithner's proposal says a comprehensive international agreement should be reached by the end of 2010 with countries agreeing to implement the measure by the end of 2012.