Going back to "old fashioned banking may not be a bad thing", Chancellor Alistair Darling said in a newspaper interview published on Thursday.
Talking about the current crisis of confidence of markets, Darling told the Daily Telegraph that lenders and borrowers had to be aware of risk.
"Primary responsibility has to rest with the people. In crude terms they need to know who they're lending to, how much they're lending and what the risk is," Darling was quoted as saying.
"Now, that's elementary banking one might think but there are times when going back to old fashioned banking may not be a bad idea."
The Treasury wants to see more transparency from banks over investments in complex financial instruments and looks set to bring the issue up at the upcoming meeting of European Union finance ministers in Portugal this weekend.
"Institutions themselves need to open their own eyes and be more honest. When someone comes up with a fantastic way of making money they need to ask, how is this money being made and what are the risks," the newspaper quoted Darling as saying.
"My starting point is this that government can't stand on the shoes of borrowers or lenders. They (borrowers) need to ask themselves, 'can I repay this' and lenders need to ask themselves 'if it goes wrong can I get it back?'. People need to think long and hard about this."