The Bank of England has unveiled plans that mean rule-breaking bankers may have to pay back bonuses up to seven years after being awarded them.
Bankers that are found guilty of causing a bank to fail could also be jailed for long periods.
Even if bonuses paid in shares have been cashed and spent, bankers could be asked to pay the money back.
The banking industry said the new rules could put UK banks at a disadvantage compared with banks elsewhere.
Many bankers receive a substantial chunk of their pay in the form of an annual bonus, which can be up to double their basic salary.
Under current rules, that bonus is usually deferred for a period of three to five years, during which time it can be clawed back if appropriate.
End Quote Antony Jenkins Barclays chief executiveIn principle, I support the idea that where there is wrongdoing, there should be appropriate punishment"
But misconduct such as rigging interest rates or reckless risk-taking can take longer to emerge, so under the new policy, bonuses may be clawed back up to seven years later.
There will also be a new criminal offence, involving a "reckless decision" which causes a financial institution to fail.
To be found guilty, senior managers would have to be aware at the time that their actions might cause the bank or building society to collapse.
'Responsibility'"Holding individuals to account is a key component of our job as regulators of banks," said Andrew Bailey, the Bank's deputy governor for prudential regulation.
"The combination of clearer individual responsibilities and enhanced risk management incentives will encourage individuals in banks to take greater responsibility for their actions," he said.
The move comes days after Lloyds Banking Group was fined £218m.
The company was condemned for "serious misconduct" over certain key interest rates set in London.
The British Bankers' Association maintains the rules will put UK banks at a disadvantage to their foreign competitors and could see top bankers, and the tax they contribute, go elsewhere.
'Conduct issues'Commenting on the plans, Antony Jenkins, chief executive of Barclays, said: "I believe that banks have to regulate themselves and that's why culture is so important, so that banks do the right business in the right way.
"I would say that in principle, I support the idea that where there is wrongdoing, there should be appropriate punishment.
"If that's criminal wrongdoing, it should be criminal, if it's recklessness, that should be punished also, so I'm not against the concept of clawback, " he continued.
The Bank of England warned in March that bankers might have to return their bonuses up to six years after receiving them.
Speaking earlier in the year, Mark Carney, the governor of the Bank of England, told the BBC's Andrew Marr that bank bonuses should be deferred for a "very long time" to ensure bad practice was not rewarded.
He said the structure of compensation should change to allow banks to take back bonuses if senior staff were found to have taken "risks that were not fully understood" and if there were "conduct issues".
He said new rules already in place would prevent banks from paying increased bonuses if their capital levels fell below a certain level.
In February, the Bank of England set out tougher proposals for non-EU banks, to try to prevent a repeat of the 2008 financial crisis.
Non-EU banks wanting to take deposits would have to set up subsidiaries in the UK and face stricter rules, it said.
These would then be directly regulated by the UK's Prudential Regulatory Authority (PRA).
Do you work in finance? If so, what are your thoughts on the move? You can send us your views and experiences by emailing haveyoursay@bbc.co.uk using the subject line "bank bonuses".
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