By Amanda Becker

WASHINGTON, Jan 5 (Reuters) - U.S. Democratic presidential candidate Bernie Sanders, who has made reining in Wall Street a top campaign theme, will warn on Tuesday that financial-sector greed is "destroying the fabric of our nation" and detail his plan to break up big banks, his campaign said.

Sanders will deliver what his campaign is calling a "major policy address" on Wall Street reform in New York.

The U.S. senator from Vermont is challenging front-runner Hillary Clinton, a former U.S. senator from New York, and former Maryland Governor Martin O'Malley for the Democratic nomination to run for president in November 2016.

Sanders will also respond to criticism from Clinton's campaign that his approach would not adequately regulate non-bank financial institutions, and explain why he favors reinstating the Glass-Steagall Act, a Depression-era law that prohibited commercial banks from engaging in investment banking activities.

"If a bank is too big to fail, it is too big to exist; when it comes to Wall Street reform, that must be our bottom line," Sanders will say, according to prepared remarks provided at Reuters' request.

Sanders and Clinton have tussled over the best way to curb the risky behavior on Wall Street that caused the 2008 financial crisis and triggered the worst U.S. economic slump since the Great Depression.

Sanders, who is popular with the Democratic Party's populist wing, will pledge to create a "too-big-to-fail list of commercial banks, shadow banks, and insurance companies" within the first 100 days of his presidential administration and to break up those institutions in the first year, according to his prepared remarks.

Clinton has endorsed an approach that would break up large banks that take excessive risks. She also believes that reinstating Glass-Steagall, an idea popular with progressive Democrats, would not address the types of institutions that have risen since the law was written in the 1930s. Glass-Steagall's main provisions were repealed in 1999 during the presidency of her husband, Bill Clinton.

One of Clinton's top Wall Street advisers, former U.S. financial regulator Gary Gensler, on Monday criticized Sanders as not focusing on regulating the type of non-bank institutions such as hedge funds and insurance companies that make up the so-called "shadow-banking industry."

But Sanders will say on Tuesday that legislation to reinstate Glass-Steagall, which he has championed along with Democratic Senator Elizabeth Warren of Massachusetts, a favorite of progressives, "aims at the heart of the shadow banking system," according to prepared excerpts.

Sanders will also point out that JPMorgan Chase & Co , Bank of America Corp and Wells Fargo & Co are nearly 80 percent bigger than when they accepted money from the U.S. government during the 2008 bailout.

(Reporting By Amanda Becker; Editing by Jonathan Oatis)