Global regulators' joint efforts to create a system that allows big banks to fail will help to stem renewed fragmentation of the global financial system, Bank of England deputy governor Paul Tucker said on Thursday.

Tucker, who is the front-runner to follow governor Mervyn King at the helm of the BoE next year, made the comments in conference speech that carried no references to monetary policy or the state of the British economy.

Tucker highlighted the work of Britain's Financial Stability Board and other global bodies in creating a system that allows banks to fail without threatening the financial system.

"The international authorities are committed to maintaining global finance - global capital markets, the free flow of capital across borders," he said.

Around the world domestic authorities have been putting in place defensive measures since the financial crisis, he said.

"A world in which public money is used to bail out banks or dealers, is a world in which (fragmentation of the system) is likely because the authorities that deploy public money are accountable to domestic taxpayers - people with votes in their jurisdiction - and to nobody else," he said.

"But by delivering the FSB's global agenda - not only on resolution, but more widely - we will significantly reduce, if not remove, the need for some of those balkanising tendencies."

(Reporting by Sven Egenter; Editing by John Stonestreet)