Europe's top bankers are in talks for a proposal for a €20bn private sector European Recovery Fund, which could post security for failed banks in the event of one more monetary catastrophe.

Alessandro Profumo, Chief Executive of Italy's UniCredit, is of the belief that such a fund may well raise as much as €20bn ($25bn) of capital over a few years, offering a failed bank with the possibility to revitalize itself in the commercial markets, without offering a remedy to Government assistance in financing.

The fund will offer precise guarantees, so as to support troubled banks to issue secured notes, Mr. Profumo writes in today's Financial Times.

The project will compete with other ideas, so as to deal with a prospective monetary disaster, for instance, Government levies.

Mr. Profumo, a seasoned Banker and one of the industry's most famous voices in Europe, thinks that his proposal is better than any other.

The alternative for authorities is to use the finance to stabilize one or a few large, below par banks that can guarantee the market that the catastrophe can be contained at a premature stage and shun a systemic incident from taking place at anytime.