The Bank of China (BOC) is expected to announce that its chairman, Liu Mingkang, has formally stepped down to take over the newly created national banking regulator, a move which will set off a new round of personnel changes at the mainland's largest foreign exchange bank. On Friday, the central government officially removed Mr Liu's title as the BOC chairman and appointed him chief of the China Banking Regulatory Commission, to oversee the troubled banking sector, banking sources said yesterday. Xiao Gang, a deputy governor of the central People's Bank of China, is widely expected to replace Mr Liu as the new BOC chairman. Sources said Mr Liu's departure was likely to herald some top-level reshuffles at the Bank of China, the better-managed of China's big four state banks. Speculation has been intensifying that Liu Jinbao, deputy chairman of BOC and chief executive officer of BOC Hong Kong, is likely to move to Shanghai, where he will become the head of the Bank of Communications, a smaller commercial bank. Sources said it was unclear as to when Lui Jinbao would assume the new post. The departure of Liu Mingkang was unlikely to bring any noticeable adverse effect on the operations of the Bank of China, although he and Liu Jinbao were credited with playing the key roles in restructuring and listing BOC's Hong Kong assets on the local stock exchange. Some even suggested that this could be a disguised blessing for the bank, as Liu Mingkang's new job will be to regulate banks, including BOC. Mr Liu, who is fluent in English and holds an MBA degree from a London business school, is one of the best-known mainland bankers in the international banking community. But he is facing a daunting task as the new head of the banking regulator. China's banking sector with a high ratio of non-performing loans is the weakest link in the Chinese economy. Premier Wen Jiabao said the banking sector would remain a top priority for his administration for the next five years. While Liu Mingkang would remain the public face of the regulator, Yan Haiwang, a close associate of Mr Wen and President Hu Jintao, is widely expected to become the powerful party secretary of the regulator. Mr Yan will also become the deputy chairman of the regulator. Mr Xiao, relatively unknown to the international banking community, is a veteran at the central bank. He moved his way up through the central bank's branches in Guangdong.