On Friday, the Federal Reserve required American banks to hold enough long term debt that can be turned liquid if they should ever face liquidity challenges in the future. The Federal Reserve, America’s central bank, said that the requirement would prevent a nationwide financial meltdown in the future.

The new Federal Reserve rule would require the larger banks like JP Morgan Chase and Wells Fargo to have enough debt on hand that can be turned into assets should any of the banks show signs of failing. The regulation will apply to eight of America’s largest banking and financial institutions, according to Bloomberg. The banks are required to carry 16 percent of their risk weighted assets. Many consider this reasonable as many thought the Fed would come in at well over 20 percent.

Chairman of the Federal Reserve, Janet Yellen, said in a statement that the requirement would add stability to the financial system and to the markets. It would, also, she stated, avoid the chaos of major bank failures like those that led to the Crash of 2009. Taxpayers, too, would be spared from the risk of this potential chaos and financial failure. Yellen also mentioned that the next step for the Federal Reserve is to eliminate the “too big to fail” challenge that greatly contributed to the crash six years ago when insurance giant AIG had to be bailed out or the entire financial structure all over the world would have collapsed.

Banks, each year, must send to the Federal Reserve a master plan of what would happen if the bank should fail or go under. In the new Fed scenario, if a bank went down, shareholders would go under but the debt they are now required to carry would be converted to equity so a new bank could emerge from the destruction and the failure. They want the banks to supply them with a treasure chest so that a new entity can be formed without costing the American taxpayers anything.