Two new deputy governors have been named at the Bank of England, as part of a radical shake-up by governor Mark Carney.

Ben Broadbent will become deputy governor responsible for monetary policy, and Nemat Shafik will take charge of markets and banking.

Both will sit on the rate-setting monetary policy committee (MPC).

And Andy Haldane, executive director for financial stability, will swap jobs with chief economist Spencer Dale.

The appointments are the first of several changes being made as part of what Mr Carney has said will be a "root-and-branch" review of how the Bank conducts market intelligence, following criticism of its response to claims of manipulation of foreign exchange (forex) rates.

In a speech at Cass Business School Mr Carney set out his vision for the Bank.

He said the financial crisis was a "powerful reminder" that to maintain economic stability the Bank had to do more than just fight inflation.

Initiatives

To do that Mr Carney has set out fifteen initiatives to reshape the Bank.

They include the creation of Ms Shafik's Deputy Governor role to oversee markets and banking.

The responsibilities of the chief economist will be expanded to help improve the Bank's collection of data

Victoria Cleland has been named as the Director for Banknotes and Chief Cashier, replacing Chris Salmon.

The appointment means Ms Cleland's name will appear on banknotes.

Five pound notes

Victoria Cleland will be the next chief cashier name to appear on banknotes

Philip Shaw, chief economist at Investec, said the dramatic changes indicated the extent of the changes Mr Carney planned to make.

"He's serious about making reform, not only to the structure of the Bank ... but also in terms of its culture," he said

'Pretty tough'.

Ben Broadbent, who takes over from the retiring Charlie Bean on 1 July, will now be responsible for the Bank's analysis of the UK economy

Ms Shafik, an International Monetary Fund official, will become the first female MPC member since 2010 when she replaces executive director for markets, Paul Fisher, on 1 August

She will be in charge of the Bank's eventual exit from its quantitative easing policy, which it has so far used to inject � 375bn into the economy by buying government bonds.

Ms Shafik will also lead the Bank's review on its market intelligence, which has come under attack after claims some Bank officials knew about the alleged fixing of foreign exchange rates

Nemat Shafik.

Nemat Shafik will take charge of markets and banking.

Jonathan Portes, director of Britain's National Institute for Economic and Social Research said that she is a good person to monitor the financial industry

"She's pretty tough and at the moment you need someone who is prepared to be fairly tough with the London financial sector," he said

'Well-rounded'.

In other changes, Anthony Habgood was named as chairman of the Bank's supervisory body, the Court of Directors, whose role will be to oversee Mr Carney's governance, including the Bank's adherence to official rules on how it operates

"These appointments result in a well-rounded senior management team at the Bank - one that will set the direction for an ambitious agenda of transformation," said Mr Carney.

BNP Paribas economist David Tinsley said the appointments would add "a degree of raised uncertainty" about when the central bank would start to raise interest rates from their current 0.5 % record low.

Mr Carney has also given the Bank a new mission statement: "Promoting the good of the people of the United Kingdom by maintaining financial and monetary stability.".

Visa and MasterCard have blocked credit card services to some Russian bank customers as a result of US sanctions.

Four banks are so far affected, all of which have links to Russians blacklisted by the US.

Visa and MasterCard, both US-based companies, are forbidden from having any dealings with those targeted by the sanctions.

The banks, which said card services stopped without warning, have described the move as unlawful.

'Frozen out'.

One of the banks affected, Bank Rossiya, is described by the US as Russia's 15th largest, with assets of $12bn (� 7.27 bn).

The St Petersburg-based bank has been singled out by Washington as the personal bank for senior Russian officials. US officials said it would be "frozen out" from the dollar.

Russian President Vladimir Putin said Bank Rossiya had nothing to do with events in Crimea and promised to transfer his wages there.

Russian President Valdimir Putin.

Russian President Vladimir Putin has promised to protect Bank Rossiya.

"I personally don't have an account there, but I certainly will open one on Monday," he told a meeting of Russia's Security Council.

President Putin also instructed the Russian central bank to step in, if needed, but the latter said the sanctions on Bank Rossiya did "not have a serious bearing on the lender's financial stability".

'Illegitimate'.

Visa and Mastercard also confirmed they had stopped providing services to SMP Bank, which is controlled by US-blacklisted brothers Arkady and Boris Rotenberg.

Continue reading the main story.

".

Start Quote.

I personally don't have an account there, but I certainly will open one on Monday.".

Vladimir Putin.

Russian President.

The bank, which is Russia's 39th biggest with $5bn in assets, called the actions "illegitimate" because its owners, rather than the bank itself, were the subject of sanctions.

Bank Rossiya's affiliate banks, Sobinbank and InvestKapitalBank, were also affected.

Visa said more than 99 % of its business in Russia was untouched by sanctions.

Russian shares fell sharply on Friday as investors weighed the impact of western sanctions over Ukraine.

The MICEX index, which is priced in roubles, fell as much as 3 % and the RTS, which is priced in dollars fell 3.6 %.

If Russia took further action in Ukraine, stocks slumped after US President Barack Obama said sanctions might be extended to key parts of the Russian economy.

Share falls.

Russia's mining, defense and natural resources sectors could all be targets.

Stocks recovered some ground during the day after Russian President Vladimir Putin moved to restore calm following the introduction of asset freezes and visa bans by the US against high ranking Russian officials.

The MICEX closed down 1 % and the RTS index was down 1.3 % at the end of the day.

Russia's President Vladimir Putin (R) walks with Russian Railways President Vladimir Yakunin (L) during his visit to a recently constructed train station in Sochi (January 4, 2014).

Allies of the Russian president targeted by US sanctions include railways boss Vladimir Yakunin (left).

Although only banks with connections to high-ranking Russian officials have been targeted, Russian bank shares were broadly lower.

Shares in Sberbank, Russia's largest bank, closed 1.17 % lower - having fallen 2.9 % earlier on Friday, while shares in VTB Bank were 2.61 % lower after falling 4.3 % earlier in the day.

Other sectors were also hit. Gas giant Gazprom was down 0.9 %, oil firm Lukoil ended the day 1.36 % higher. Russian steel company NLMK closed 1.94 % lower.

Shares in gas producer Novatek closed down 9.63 %. The company is part owned by Gennady Timchenko, a shareholder in Bank Rossiya and one of the wealthy Russian businessmen targeted by Western sanctions.

Negative outlook.

Ratings agencies S&P and Fitch warned they were changing their outlook for the Russian economy to "negative" from "stable" - the first stage before a possible downgrade in the country's credit rating - because of the potential impact of sanctions.

Fitch said: "Since US and EU investors and banks may well be reluctant to lend to Russia under the current circumstances, the economy may slow further and the private sector may require official support.".

Russian businessman Gennady Timchenko.

Gennady Timchenko, owner of gas firm Novatek and shareholder in Bank Rossiya, has been targeted by sanctions.

President Putin's spokesman Dmitry Peskov criticised the move, suggesting it was not an objective decision and that somebody "ordered" it.

Russia's credit rating is currently BBB.

Meanwhile the rouble was stable on Friday having previously fallen sharply on Thursday evening in response to the announcement of further US sanctions.

Later on Friday morning Germany said it had decided to suspend approval of all defence-related exports to Russia.

Berlin ordered defense contractor Rheinmetall to halt delivery of combat simulation gear to Russia earlier this week.

The ministry spokesman said this was a "one-off" case, but future deals would also be blocked.

"The (Rheinmetall) case that you are talking about is a one-off case. It is true that given the current situation in Russia, we are notapproving any exports of defense goods to this country at the moment," the spokesman said.

German banker Korbinian Ibel gave up a company car and took a pay cut to seize the chance to join a new organization that could play a big role in taking European integration to the next level.

He has accepted one of the top jobs at a new part of the European Central Bank in Frankfurt that from November will police 130 banks in 18 countries across the euro zone, including Commerzbank (CBKG. DE), where Ibel worked for five years and was in charge of risk.

As a former banker, Ibel has the expertise the ECB needs for its new watchdog, known as the Single Supervisory Mechanism. But attracting more bankers of his caliber might prove tough given that the ECB jobs pay less than the finance sector.

The European Union's plan to bring euro zone bank supervision under one roof at the ECB aims to restore the region's banks to health after the financial crisis.

The United States got its banks quickly back on track, but in Europe many banks are weak and still in recovery mode and wary of lending money needed to drive economic recovery.

Ibel sees his new job as central to efforts to help fix the banks which could prevent a repeat of the crisis of the last few years that has hit jobs and growth.

"This is a unique opportunity to shape the future of Europe," Ibel told Reuters, sitting in his office in Frankfurt's Japan Tower, a stone's-throw away from the ECB's headquarters. A few moving boxes still need unpacking

"What we do will not only have an impact on the European banking system, but also on the real economy, which will benefit from safer and stronger banks," he said.

Unifying banking supervision at the ECB is the most ambitious step towards European integration since the launch of the single currency 15 years ago.

Hiring the right people from the start is crucial for the project's success and the ECB is leaning heavily on national authorities to find the 770 supervisors it needs by November.

Since the financial crisis, which exposed big failings in regulation, the required skills for effective supervision have changed, said Julie Dickson, who works at the Financial Stability Board, which coordinates financial regulation for the Group of 20 (G20) leading economies.

"These days, there is an expectation that supervisors have robust discussions with Boards and ceos and they delve into matters like succession planning at systemically important banks and they delve into risk culture," Dickson, who chairs the supervisory intensity and effectiveness group at the FSB, said.

"These are skills that were not abundant in supervisory agencies some years ago," said Dickson, who is also the head of Canada's main financial services regulator, the Office of the Superintendent of Financial Institutions (OSFI)

The ECB has its work cut out finding all the supervisors it needs by November. There are 200 people already working for the new watchdog but that is both supervisors and support staff

As Sabine Lautenschlaeger, vice-chair of the watchdog has said: "Supervisors don't grow on trees.".

HUNDREDS OF APPLICATIONS.

The ECB has started filling the empty seats from the top and is receiving hundreds of applications for the rest.

Ibel, 40 and a father of four, is one of two director generals that have come from the private sector out of a total of four.

He often fields calls at the weekend from former industry colleagues, asking about possible jobs, but their enthusiasm usually fades once lower ranking roles come into play. Those are the kind jobs Ibel mainly needs to fill

His department of 250 staff is the largest of four at the new watchdog, in charge of a wide range of functions from risk analysis and crisis management to developing guidelines for supervisors, defining enforcements and sanctions and handing out authorizations to banks

Soon, he will go on a tour around Europe, to meet bankers and supervisors in Belgium, France, Finland, Austria, Spain, Italy and the Netherlands, building relationships and keeping an eye out for those he would like to bring on board

The pay for supervisors at the ECB watchdog normally starts at around 55,000 euros per year and can go up to about 120,000 euros, depending on expertise. ECB staff also get taxed according to European rates, between 8 and 45 percent, which are often lower than in EU member states.

Average pay at Deutsche Bank (DBKGn. DE), for example, was $169,500 last year and at Swiss bank UBS (UBSN. VX) $380,000.

The ECB is also developing procedures to ensure that any job a supervisor takes during a period of up to two years after leaving the ECB will not lead to a conflict of interest with the work of the bank watchdog.

"WILL THEY EAT US, OR WILL WE EAT THEM?".

But for Ibel, it was not about the pay, but about influence.

Having been on the eceiving end of supervision throughout his career at Accenture, Boston Consulting, Deutsche Bank and Commerzbank, which taught him the industry short-cuts to deal with regulation, he now wants to use his knowledge to sharpen oversight.

"I will put more focus on material risks," Ibel said.

Instead of asking banks in questionnaires how large their staff bonuses were, it would make more sense to ask how many people had got a large bonus in spite of missing their performance targets.

A mixture of career supervisors and bankers from the private sector could be a powerful combination for the new watchdog. But they need to be put together with great care, Dickson said.

"Integrating people from the private sector with career supervisors is also important and something you need to pay attention to, because they can be different, there can be cultural issues," she said.

At Britain's Financial Services Authority (FSA), replaced in 2013 after 12 years by a new regulatory regime, such a clash of cultures became evident.

"There was a tension between the public sector culture and the City culture," a former senior FSA executive said, referring to the City of London finance.

At the ECB, there is some unease among staff about newcomers from the private sector.

"Will they eat us, or will we eat them?" one central bank source asked.

As for Ibel, he said his career had prepared him for a lot, having been co-head of treasury at Commerzbank when U.S. investment bank Lehman collapsed or when managing Commerzbank's Ukraine Bank Forum that fell victim to a crisis in emerging markets.

"What I haven't been prepared for is a public authority," Ibel said. "But I'm willing to learn.".

Bankers' expertise needed to sharpen new bank watchdog's teeth

German banker Korbinian Ibel gave up a company car and took a pay cut to seize the chance to join a new organization that could play a big role in taking European integration to the next level.

He has accepted one of the top jobs at a new part of the European Central Bank in Frankfurt that from November will police 130 banks in 18 countries across the euro zone, including Commerzbank (CBKG. DE), where Ibel worked for five years and was in charge of risk.

As a former banker, Ibel has the expertise the ECB needs for its new watchdog, known as the Single Supervisory Mechanism. But attracting more bankers of his caliber might prove tough given that the ECB jobs pay less than the finance sector.

The European Union's plan to bring euro zone bank supervision under one roof at the ECB aims to restore the region's banks to health after the financial crisis.

The United States got its banks quickly back on track, but in Europe many banks are weak and still in recovery mode and wary of lending money needed to drive economic recovery.

Ibel sees his new job as central to efforts to help fix the banks which could prevent a repeat of the crisis of the last few years that has hit jobs and growth.

"This is a unique opportunity to shape the future of Europe," Ibel told Reuters, sitting in his office in Frankfurt's Japan Tower, a stone's-throw away from the ECB's headquarters. A few moving boxes still need unpacking.

"What we do will not only have an impact on the European banking system, but also on the real economy, which will benefit from safer and stronger banks," he said.

Unifying banking supervision at the ECB is the most ambitious step towards European integration since the launch of the single currency 15 years ago.

Hiring the right people from the start is crucial for the project's success and the ECB is leaning heavily on national authorities to find the 770 supervisors it needs by November.

Since the financial crisis, which exposed big failings in regulation, the required skills for effective supervision have changed, said Julie Dickson, who works at the Financial Stability Board, which coordinates financial regulation for the Group of 20 (G20) leading economies.

"These days, there is an expectation that supervisors have robust discussions with Boards and ceos and they delve into matters like succession planning at systemically important banks and they delve into risk culture," Dickson, who chairs the supervisory intensity and effectiveness group at the FSB, said.

"These are skills that were not abundant in supervisory agencies some years ago," said Dickson, who is also the head of Canada's main financial services regulator, the Office of the Superintendent of Financial Institutions (OSFI).

The ECB has its work cut out finding all the supervisors it needs by November. There are 200 people already working for the new watchdog but that is both supervisors and support staff.

As Sabine Lautenschlaeger, vice-chair of the watchdog has said: "Supervisors don't grow on trees.".

HUNDREDS OF APPLICATIONS.

The ECB has started filling the empty seats from the top and is receiving hundreds of applications for the rest.

Ibel, 40 and a father of four, is one of two director generals that have come from the private sector out of a total of four.

He often fields calls at the weekend from former industry colleagues, asking about possible jobs, but their enthusiasm usually fades once lower ranking roles come into play. Those are the kind jobs Ibel mainly needs to fill.

His department of 250 staff is the largest of four at the new watchdog, in charge of a wide range of functions from risk analysis and crisis management to developing guidelines for supervisors, defining enforcements and sanctions and handing out authorizations to banks.

Soon, he will go on a tour around Europe, to meet bankers and supervisors in Belgium, France, Finland, Austria, Spain, Italy and the Netherlands, building relationships and keeping an eye out for those he would like to bring on board.

The pay for supervisors at the ECB watchdog normally starts at around 55,000 euros per year and can go up to about 120,000 euros, depending on expertise. ECB staff also get taxed according to European rates, between 8 and 45 percent, which are often lower than in EU member states.

Average pay at Deutsche Bank (DBKGn. DE), for example, was $169,500 last year and at Swiss bank UBS (UBSN. VX) $380,000.

The ECB is also developing procedures to ensure that any job a supervisor takes during a period of up to two years after leaving the ECB will not lead to a conflict of interest with the work of the bank watchdog.

"WILL THEY EAT US, OR WILL WE EAT THEM?".

But for Ibel, it was not about the pay, but about influence.

Having been on the receiving end of supervision throughout his career at Accenture, Boston Consulting, Deutsche Bank and Commerzbank, which taught him the industry short-cuts to deal with regulation, he now wants to use his knowledge to sharpen oversight.

"I will put more focus on material risks," Ibel said.

Instead of asking banks in questionnaires how large their staff bonuses were, it would make more sense to ask how many people had got a large bonus in spite of missing their performance targets.

A mixture of career supervisors and bankers from the private sector could be a powerful combination for the new watchdog. But they need to be put together with great care, Dickson said.

"Integrating people from the private sector with career supervisors is also important and something you need to pay attention to, because they can be different, there can be cultural issues," she said.

At Britain's Financial Services Authority (FSA), replaced in 2013 after 12 years by a new regulatory regime, such a clash of cultures became evident.

"There was a tension between the public sector culture and the City culture," a former senior FSA executive said, referring to the City of London finance.

At the ECB, there is some unease among staff about newcomers from the private sector.

"Will they eat us, or will we eat them?" one central bank source asked.

As for Ibel, he said his career had prepared him for a lot, having been co-head of treasury at Commerzbank when U.S. investment bank Lehman collapsed or when managing Commerzbank's Ukraine Bank Forum that fell victim to a crisis in emerging markets.

"What I haven't been prepared for is a public authority," Ibel said. "But I'm willing to learn.".

Bank of America Corp (BAC. N) mentioned this does not owe the U.S. authorities the $2.1 billion that is

looking for in charges after a court located the financial institution liable for fraud over damaged mortgage

loans offered through its Countrywide system, baseding on a court filing earned on Wednesday.

Lawyers for the financial institution shared the government's request "counteracts every helpful legal concept"

as well as called it a "remarkable farewell from truth," the filing explained. Bank of America mentioned in the

declaring that this need to merely need to spend the quantity this made in exploit selling the financings, which that contended was actually zero.

A spokesperson for the U.S. attorney's office in Manhattan refused to comment. A speaker for Bank of America might not be actually grabbed review Wednesday evening.

A government jury in New York in October discovered Bank of America as well as Rebecca Mairone, a previous mid-level executive at Countrywide, each liable for fraudulence in the public legal action.

The situation paid attention to a mortgage loan lending process at Countrywide, which Bank of America acquired in July 2008, contacted the "High Speed Swim Lane," or even alternatively "HSSL" or "Hustle.".

The government contended that Countrywide's program focused on and also compensated employees for the

volume instead of the premium of loans made and also removed lists manufactureded in order to guarantee that financings were audio.

Banking company of America and Mairone denied misbehavior. Financial institution of America possesses explained that was actually looking at options for a look.

Any fine will be actually determined by U.S. District Judge Jed Rakoff.

Prosecutors originally requested $863.6 million, however eventually elevated the total up to $2.1 billion.

In its own response on Wednesday, Bank of America explained that the U.S. authorities was inaccurate through deriving the popped the question fine on its indecent "increase" from the payday loans.

As an alternative, the legislation demands the fine total up to be figured out by assessing the bank's

"pecuniary gain," or quantity of income that it formed coming from selling the materially flawed HSSL loans, the financial institution mentioned. It approximated that total up to be actually no, according to the submitting.

Dental debates have been specified for March THIRTEEN.

In its own feedback on Wednesday, Bank of America stated that the U.S. federal government was incorrect by

deriving the proposed fine on its own gross "increase" from the financings. As an alternative, the legislation demands the charge quantity to be calculated through determining the banking company's "pecuniary gain,"

or volume of income that it formed coming from selling the materially faulty HSSL loans, the financial

institution explained. It approximated that quantity in order to be absolutely no, depending on to the filing.

HSBC has reported a 9 % rise in profit for last year, boosted by cost cuts as it restructured the business.

Reported pre-tax profit was $22.6 bn (£ 13.6 bn), compared with $20.6 bn in 2012, the bank said.

HSBC said it had also increased its bonus pool for staff by 6 % to $3.9 bn for last year.

Chief executive Stuart Gulliver also saw his overall pay rise last year. He received a total pay package of £8m, up from £7.5 m in 2012.

The bank also revealed that 239 of its staff, 93 of whom are in the UK, had been paid £ 1m or more last year.

HSBC also said that for 2014, it would offer senior staff higher fixed-pay allowances.

The move will enable the bank to sidestep new European rules, which came into force in January, preventing bankers from being paid bonuses worth more than twice their salary.

TUC general secretary Frances O'Grady criticised the move.

"It would be great if banks put the same effort into lending to small businesses and investing in infrastructure as they do to getting round EU rules on boardroom bonuses," she said.

Cost cutting

HSBC closed or sold 20 non-strategic businesses last year as it streamlined the business.

"The group today is leaner and simpler than in 2011, with strong potential for growth," said chief executive Stuart Gulliver.

Hong Kong and Asia Pacific were responsible for the bulk of the group's profits.

The banking group said it had cut its full-time staff equivalent numbers by 41,000 to 254,000 over the past three years.

Operating expenses also fell by 6 % over the year, but the fall was less than analysts had forecast.

Choppy markets ahead

The bank also warned that it expected "greater volatility" and "choppy markets" this year.

"Overall, we remain optimistic about the longer-term prospects of emerging markets," it added.

Shares fell more than 3 % after the results.

Gary Greenwood, analyst at Shore Capital, said the results, which were lower than consensus expectations, were "disappointing".

"Given the headline miss in the 2013 results, we would be surprised if there were not to be downgrades to our own and market consensus expectations for 2014 and beyond," he added.