TheTreasury Department and Federal Deposit Insurance Corp. (FDIC) should have the power to decide how to resolve systemically important financial companies, the Treasury said Wednesday.

In a press release offering details of proposed legislation, Treasury said the new powers would build on the FDIC's existing authority over banks and thrifts, including allowing the agency to provide financial assistance or place a company into conservatorship and receivership.

Any decision about whether to help or seize a failing systemically important institution would be made in consultation with the Federal Reserve Board and other appropriate federal regulators, the Treasury said.

The decision would be triggered if the financial company in question was in danger of becoming insolvent, its insolvency would have "serious adverse effects on economic conditions" for the country and if taking emergency action would avoid or mitigate those effects.

Financial assistance could take many forms, including equity investments, loans, purchasing its obligations or assets, and assuming or guaranteeing its liabilities. Treasury said the Deposit Insurance Fund, which funds resolutions of banks and thrifts, would not be tapped to assist systemically important companies.

Instead, that funding would be drawn from a mandatory appropriation to the FDIC out of the general fund of the Treasury or through assessments on systemically important financial companies.

The Treasury press release does everything but explicitly give resolution powers to the FDIC, instead leaving the question of exactly what agency is handling a failing institution vague. But a Treasury spokesman said Wednesday the FDIC should have that power, and details in Treasury's proposal, including funneling the funding for these rescues through the FDIC, appear to leave no other option.

The Treasury said in a press release its bill would govern any systemically important company that falls outside of the existing resolution regime.

More details may be released on Thursday, when Treasury Secretary Tim Geithner is expected to testify on the administration's plan for regulatory reform at a House Financial Services Committee hearing.

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