When the mainland plots its radical reforms of the financial sector later this month, one official worth watching closely will be Yan Haiwang, a deputy governor of the central bank, the People's Bank of China. Mr Yan, 63, is ranked just behind the central bank governor and ahead of the other five deputy governors. He may be the least visible of the men in charge of the nation's finances, but government sources say Mr Yan will play a leading role in the reforms of the mainland's banking sector. China's premier-in-waiting, Wen Jiabao, is expected to unveil the reform blueprint when the central government opens its crucial financial work conference later this month. As Mr Wen is weighing various options for accelerating reforms of the banking system - the most problematic link in the Chinese economy - Mr Yan's name is constantly mentioned. He is seen as a strong contender to become the party secretary of China's new banking watchdog to be set up soon to strengthen regulatory controls. Sources say that Mr Yan is leading preparations for setting up the China Banking Regulatory Commission, which should be approved by the National People's Congress in March. The establishment of the watchdog, which will take over the regulatory functions from the central bank, marks an important step towards knocking China's banking sector into shape. Mr Yan's elevation is partly because of his close connections to Mr Wen and Hu Jintao, Vice-President and the new party chief, but also because he is seen as a no-nonsense doer. 'He is expected to play a key role in reforms of the banking sector although he is not widely known outside banking circles,' one source said. 'Many mainland banking officials have even underestimated his strength and capabilities.' Compared with high-profile bankers like Bank of China chairman Liu Mingkang or the new central bank governor Zhou Xiaochuan, Mr Yan's first serious involvement in the banking sector occurred only five years ago when he joined the central bank. Sources said he was recommended for the job by Mr Wen and Mr Hu. Both Mr Wen and Mr Hu worked in the remote province of Gansu where Mr Yan was provincial party secretary for five years from 1993. His official resume shows that he spent much of his earlier career in the construction industry. From the beginning, Mr Yan was responsible for the important personnel and anti-graft issues at the central bank and commercial banks. He is also the deputy chief of the so-called Central Financial Work Committee, which oversees the banking, insurance and securities sectors. Sources said Mr Yan played a crucial role in investigating a series of major corruption scandals. The fact that he is to be appointed as the party chief of the new banking watchdog is seen as reflecting the confidence of the new leadership in his capabilities. Sources said the chairman of the new watchdog is most likely to be chosen between Mr Liu and Xiao Gang, another deputy governor of the central bank. But it is understood the central government had some reservations about the two of them. Mr Liu, armed with an MBA from a business school in London, is one of the most prominent mainland bankers and he would no doubt be particularly welcomed by the international banking community. However, sources said some within the central government believed that Mr Liu had a 'weakness' in his fondness for the grandiose, which is usually frowned upon in official circles on the mainland. Another candidate for the job is Mr Xiao, who has been working in the central bank and its branches for a long time, boasting ample experience in bank regulation. However, despite Mr Xiao's popularity at the central bank and his extensive experience, some government leaders have doubts about giving him this important mandate. Sources said Mr Liu stood a better chance of becoming the chairman of the watchdog. If that is the case, Mr Xiao is likely to replace Mr Liu as the new chairman of the Bank of China.