HONG KONG (MarketWatch) - U.S. authorities are considering radical new measures to shore up ailing financial markets, including guaranteeing billions in bank debt and insuring all U.S. bank deposits for a temporary period, according to a report Friday in The Wall Street Journal's online edition.

The moves, if implemented, would mark the government's most extensive intervention in the financial system, the Journal reported, citing unidentified people familiar with the situation. See full Journal story.

Backing all U.S. bank deposits, a measure which is currently only at the discussion stage, would be aimed at preventing a further exodus of cash from financial institutions, including small and regional banks, The Journal reported. The move is being floated as banking customers have pulled money out of healthy community banks under the assumption that only deposits held at larger financial institutions would be backed by government guarantees in the event of a failure.

Removing the ceiling on deposit insurance would require multiple government agencies to agree that a "systemic risk" exists, thereby invoking a rarely used legal power. Some banking regulators say the move is justified following repeated efforts by the federal government to prop up ailing institutions.

It is not clear that either idea will be carried out, and U.S. officials have downplayed expectations such a move would be announced this weekend, The Journal reported. The report also noted the Bush administration is under pressure to find a solution to the economic turmoil that goes beyond the $700 billion financial rescue package that was recently signed into law. If the government guaranteed all bank lending, the measure would effectively entail the U.S. becoming the backstop for the nation's financial system.

Top officials from the Group of Seven leading industrial nations will meet later today in Washington to discuss a proposal from the U.K. government to bolster bank lending. The U.K. unveiled a plan earlier this week in which it will guarantee up to 350 billion pounds ($432 billion) in bank debt maturing over the next three years.