OTTAWA (AFP) - Big banks should plan for their demise with "living wills" to wind down operations in an orderly fashion in case they fail, to avoid future financial sector meltdowns, a Canadian official said Wednesday.

The idea has been "gaining traction" and is starting to get fleshed out following the failure of investment bank Lehman Brothers last year that sparked a global financial crisis, the senior Canadian finance official told a briefing.

It is to be further discussed at a Group of 20 developed and developing nations' finance ministers and central bank governors at a summit in Scotland on November 6-7.

Corporations or financial institutions viewed as too big to fail would be asked under the plan to draw up "living wills" to explain how they would wrap up operations in an orderly fashion in case of "a life-threatening event," the official said.

Such a scheme would "be conducive to reducing moral hazards" faced by governments reluctant to ever again bailout behemoth financial institutions to avoid wider chaos in the financial system, the official said.

Other G20 topics of discussion will be reshaping the global financial system, a coordinated stimulus exit strategy, avoiding future trade imbalances that were "important contributing factors" in the current financial crisis, "more balanced growth," and tackling some nations' huge structural deficits.