The Bank of England's Prudential Regulation Authority (PRA) has forced UK lender Standard Chartered to strip its finance director Richard Meddings of his responsibility for risk.
The PRA is reported to have told the firm that it was "not happy" with Mr Meddings' position and the lender has acted upon this, with responsibility for risk now moving to Peter Sands, the chief executive.
According to the Telegraph, which cited a source close to the situation, the regulator was concerned about a possible conflict between Mr Medding's financial responsibilities and his duty to oversee risk.
The move is likely to cause shockwaves within the City as Mr Meddings was one of the chief architects of Standard Chartered's path through the financial crisis without taxpayer support.
Standard Chartered has suffered a difficult 12 months, as it was fined $667 million in the US after an investigation into money-laundering found it had broken sanctions with Iran and other rogue states.
By Tony Aynsley