Proposals designed to stop taxpayers¹' money being used to bail² out failed banks will be unveiled by the European Commission later.

欧盟委员会将提议避免用纳税人的钱来挽救破产的银行。

They aim to ensure losses are borne by bank shareholders³ and creditors⁴ and minimise costs for taxpayers.

It wants to prevent runs on banks in one country - such as Spain or Greece - pulling down the entire system.

A key goal is to make sure that essential everyday banking⁵ functions - such as cash machines - are kept going.

The global financial crisis has seen a succession of major banks fail, including Northern Rock, Lehman Brothers, leading Icelandic banks, the Belgian-Dutch giant Fortis and Franco-Belgian Dexia and the Republic of Ireland's Anglo Irish Bank.

However, new legislation is unlikely to came into force before 2014 at the earliest. With speculation⁶ growing that Spanish banks, and possibly those in Cyprus, will need support, that would be too late to protect taxpayers from shouldering the burden.

Spain is trying to find more than 80bn euros (£65bn; $100bn) to strengthen its banks' capital buffers⁷.

On Tuesday, Spain's finance minister said the credit markets were "effectively shut" to his country.

Cristobal Montoro told Spain's Onda Cero radio "the door to markets is not open for Spain".

A key test will come on Thursday, with Spain due to auction⁸ up to 2bn euros of bonds.

Meanwhile, on Wednesday Moody's cut its risk rating for several German and Austrian banks, including Commerzbank.