By The Canadian Press

OTTAWA - Global finance ministers are getting closer to establishing plans for protecting the world against another financial crisis and reining in large financial institutions, senior government officials say.

Officials speaking in advance of the G20 finance ministers meeting in Scotland this weekend say it is likely the participants will agree on a plan to watch over each other's financial systems.

The officials, who spoke on background, said policy-makers agree that the kind of global imbalances that were allowed to build up in 2005 and 2006 cannot be allowed to happen again.

As a result, the finance ministers have been asked to come up with a system of mutual assessment of each others' economies to ensure monetary flows remain sustainable.

The massive trade imbalance between the U.S. and China has been partially blamed for triggering the recession, which many say has been the worst since the Second World War.

The ministers are also expected to make progress on what some have called "living wills" for big financial institutions which have been deemed too big to be allowed to fail.

The idea is that these institutions would be forced to make plans for an orderly wind-down in an emergency, or establish fire-walls to risk so that an entire organization is not brought down when one section fails.

In a recent speech, Bank of Canada governor Mark Carney warned that the world is "awash in moral hazard," because when financial institutions know they will be bailed out, they are more likely to take foolish risks.