From next year each bank will be given an individual pass mark for the amount of capital it needs to hold at the end of the test, as opposed to the common hurdle in the tests so far.
This year all banks will have to show they still have a core capital buffer of 4.5 percent at the end of the test, but this hurdle is set to be at least six percent next year.
The BoE said it did not think there would be much benefit to conducting extensive probes of the British units of foreign investment banks, as their financial health depended on their parent companies, which the BoE cannot regulate.
Only banks with more than 50 billion pounds of retail deposits will be covered by the stress tests, which includes RBS, Lloyds, HSBC,Santander UK, Standard Chartered and Nationwide Building Society.
Once a year the BoE will come up with a scenario based on the credit cycle, which will get tougher when assets prices are most overvalued and credit conditions are weakest.
The BoE hopes that this will encourage banks to lend more prudently, so that they find it easier to pass the stress test.
Every two years, the BoE will hold a separate stress test to look at structural risks, which could include banks' exposure to currency pegs or industry-wide changes.
Stress tests for the 50 percent of Britain's financial sector which is not made up of banks are also on the agenda, though there is no precise timetable.
The BoE said the model it applied to banks would often not be appropriate. Many of the risks in non-banks are sector-wide -- for example, if a number of mutual funds tried to exit a single asset category at once -- rather than firm-specific.