WASHINGTON—They are the biggest of the big — the Citigroups, the Goldman Sachses, the AIGs and other financial giants. The Obama administration doesn’t want so many around anymore.

Financial regulations proposed by the president would result in leaner and simpler institutions that don’t carry the weight of the system on their marble columns.

Around Washington and Wall Street they have come to be known as TBTF — too big to fail. It’s not just size, though. These companies are so far-flung, so intertwined and so precariously leveraged that a single one’s collapse can create systemwide tremors that imperil the finances of millions of Americans.

With that fear in mind, then-President George W. Bush’s administration stepped in to bail out Citigroup Inc., Bank of America Corp. and American International Group with tens of billions of public money last year.

Looking to avoid such a costly intervention, President Obama’s regulatory plan calls for large, interconnected companies to pay a heavy price for the systemwide risk they pose.

So far, however, congressional debate has centered on the administration’s plan to put the Federal Reserve in charge of these “systemically significant” companies. Less attention has focused on the potential effect on the institutions and the financial system’s hierarchy.

Under the administration’s proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.

They also would have to anticipate their own demise, drafting detailed descriptions of how they could be dismantled quickly without causing damaging repercussions. Think of it as planning their own funerals — and burials.

Obama’s plan, in short, aims to make it far less appealing to be so big. The plan is a step short of an outright ban on systemically risky companies.

“Without banning them we’re providing some pretty heavy penalties for entering” the top group of institutions that could pose a risk to the entire financial system, said Diana Farrell, deputy director of the White House’s National Economic Council.

“The regulator might say to a large institution, ‘Make sure there is very good reason to allow yourself to get that big, or that interconnected, or that complex because the penalties will wipe out any advantages, such as lower cost of capital, you might have.’ ”

Some companies might bite the bullet and take on the added burden; in global capital markets, some firms need to be large. Others might choose to reduce their financial footprint.

“It’s a very sophisticated and very effective way to force institutions to deconsolidate,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions

Analysts say some of the top banks that had Fed stress tests, such as Wells Fargo & Co. or Morgan Stanley, might have to weigh the cost of meeting new regulations against the benefits of their size and reach.

The severity of the conditions remains to be seen. Under Obama’s plan, those details would be worked out by the Fed and a council of regulators led by the treasury secretary. Congress would have to agree to that framework, however, and lawmakers from both parties have voiced misgivings about putting the Fed in charge.

In the end, there will be institutions that meet top tier specifications and will not break themselves up to escape the tougher oversight.

But others whose business would place them just inside or outside of that classification could end up divesting or reconsidering expansion or acquisitions.

For those that qualify for top tier designation, the administration proposes a system that would dismantle them quickly if they get into financial trouble. Right now, the government has authority to step in and take down troubled banks, but not the conglomerates that pose greater risks to the economy. That lack of authority prevented the government from dissolving Bear Stearns Cos., Lehman Brothers and AIG in an orderly manner.

Under the administration’s plan, the Treasury could decide to take a company swiftly through a bankruptcy-like process, appointing the Federal Deposit Insurance Corp. as a conservator or receiver. The FDIC currently has only the authority to take over troubled banks.

If a swift end could cause a systemwide risk, the administration would allow a government intervention that still could require taxpayer money up front. The administration recommends that the cost of any taxpayer infusion be paid later with fees assessed on bank holding companies. Farrell noted that capitalization requirements for the companies would help lessen the infusion of government money.

The government would be aided by the failing company’s own plan to wind down.

Anil Kashyap, an economist at the University of Chicago School of Business, said simply creating a “funeral plan” could lead some companies to reconsider some of their business strategies.

“The ones that would be more complicated would have to explain to their shareholders why they are so complicated and why they would have to have more capital” to cover their dissolution, Kashyap said. “That would be a very productive outcome.”