As US lawmakers work towards strengthening the financial architecture, there seems to be an unequivocal agreement on putting in place a $50 billion trust fund collected from fees imposed on large US financial firms, which will used to set up a systemic risk regulator that would be used to wind down failing institutions.

Paul Volcker former governor of the Federal Reserve Fed said such an "arrangement would amount to euthanasia and a decent burial, not lengthy life support." This new "hard-wired mechanism" would be able to move swiftly to stabilize failing banks while a liquidation or merger is being arranged, Volcker said during a lecture at the German president's residence in Berlin. Vikram Pandit, CEO Citigroup also lent his support for such an institution and said that this is the best way to prevent another economic crisis.

An agreement on having a systemic risk regulator would remove one of several roadblocks that have delayed negotiations on the US Financial overhaul legislation, while other issues like, having a consumer protection agency is being still worked out.

The FDIC might get the responsibility for managing such institution, the people familiar with the development said.