The U.S. Federal Reserve may still be waffling on whether to raise interest rates, but one thing upon which governors are ready to act is making sure taxpayers are not again left holding the bag should the financial system face the same threats it did during the Great Recession.

The Fed last week decided to require the eight largest U.S. banks to issue long-term debt totaling $120 billion as a cushion against financial shock. The bonds, which would be equal to at least 18 percent of risk-weighted assets, would be put into the banks' holding companies and could be converted to stock to raise capital.

"This is an important step toward ending the market perception that any banking firm is ‘too big to fail,'" Fed Chairwoman Janet Yellen said, in a statement.

The U.S. Treasury ponied up $700 billion to save the nation's banks in September 2008 because the largest of them were deemed too big to fail. Forbes reported in July that the Treasury's actual commitment was $16.8 trillion. Washington declared an end to bailouts for the auto sector and Wall Street in December 2014. And Treasury Secretary Jacob Lew said the bailouts actually made a profit for taxpayers.

Since then, the biggest banks have gotten only bigger.

The Fed Friday moved to shift the burden of a bank's failure to investors rather than taxpayers. The plan, which has yet to be formally adopted, would be phased in over three years beginning in 2019, augmenting the shoring up the Fed imposed in July, requiring the institutions to raise $200 billion in additional capital.

Yellen said the latest proposal "would substantially reduce the risk to taxpayers and the threat to financial stability stemming from the failure of these [banks]." The Fed action is part of an international effort to increase the "loss-absorbing capacity" of the world's 30 largest banks.

"By increasing required loss-absorbing capacity by 60 percent or more, the long-term debt requirement will bring us closer to the goal of ensuring that even one of the nation's largest banks could fail without either endangering the financial system or prompting a government bailout," Daniel K. Tarullo, a member of the Fed's Board of Governors, said.

Sen. Elizabeth Warren, D-Mass., has been urging the breakup of the nation's largest banks and earlier this year introduced legislation along with Sen. David Vitter, R-La., that would make it harder for the Fed to bail out megabanks.