Britain will roll out its Senior Managers' Regime this year, bringing changes the central bank sees as essential to help pin responsibility for reckless behaviour on individuals.

Regulators in major financial centres have amassed evidence of bank traders trying to rig interest rate benchmarks and currency markets, with relatively few individuals punished in the courts so far.

In future, managers will have to demonstrate they were not aware of any wrongdoing on their patch if misconduct comes to light and banks have complained that it will put people off applying for top jobs.

"The key principle of that regime is to establish clearly appropriate responsibility for the governance of firms. Put like that, it is not meant to be radical or life-changing, despite whatever you may hear and read," Bailey told the Building Societies Association annual conference.

"Clarity of responsibility is I hope unobjectionable. But this is not clarity in the sense of facilitating witch hunts."

The BoE's supervisory arm, the Prudential Regulation Authority, which Bailey heads, published a consultation paper on Thursday spelling out board responsibilities.

Boards must take collective responsibility for the firm's strategy, risk appetite and ethical behaviour, he said.

Board members of banks have been criticised for not understanding some of the complex instruments being sold.

"Boards should include individuals with a mix of skills and experience that are up-to-date and cover the major business areas in order to make informed decisions and provide effective oversight of the risks," Bailey said.

Non-executive directors should ensure they have the time and resources to do their job, such as challenging executives.

"Through our supervisory work, we are seeing improvement but in our view there is more to do. Board effectiveness will therefore remain a key priority," Bailey said.

The Institute of Directors, a UK business lobby, said the PRA paper was a significant step forward and new non-executive directors needed to be properly trained so they can challenge key decisions.

Bailey also said Britain's building society sector was in a "good place" as regards to capital and liquidity, although margins have come under pressure due to increased competition in the home loans sector despite very low interest rates. "We are watching this story carefully to see what happens next," Bailey said.

(Editing by Hugh Lawson and Ruth Pitchford)

By Huw Jones