WASHINGTON, Oct. 26 (UPI) -- Senior White House officials said Rep. Barney Frank, D-Mass., would introduce a bill to allow the government to seize troubled U.S. non-bank firms.

The bill addresses a key debate that emerged during the financial crisis: How to manage companies deemed too-big-to-fail as their disorderly collapse would threaten the financial system, The New York Times reported Monday.

U.S. Treasury Secretary Timothy Geithner was prepared to endorse the plan, the newspaper said.

The plan includes requiring firms to maintain a larger cushion in reserve against a possible failure and curtail heavily leveraged borrowing. It would make it easier for the government to demand a change in company leadership, restructure debt and dilute the shareholders' holdings.

Under the plan, the government would control how a company is dismantled, rather than creditors, Assistant Treasury Secretary for financial institutions Michael Barr said.

"These changes will impose market discipline on the largest and most interconnected companies," he said.

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