In a move sure to bolster its image with regulators and investors, Bankers Trust New York Corp. has hired former Deputy Treasury Secretary Frank N. Newman for a newly created No. 3 post.

The appointment makes Mr. Newman, dubbed "Mr. Integrity" by one analyst, a possible successor to Charles S. Sanford, chairman and chief executive. Mr. Sanford is scheduled to retire next year.

Bankers Trust, the nation's seventh-largest bank, said Thursday that Mr. Newman has joined as senior vice chairman, responsible for financial, administrative, and control functions.

Observers said the move should help stabilize Bankers Trust in the wake of charges that its derivatives salespeople misled corporate customers.

"I'm delighted to see it," said Robert Albertson, senior banking analyst at Goldman, Sachs & Co. "He brings a great deal of respect to an organization that is currently under criticism."

Mr. Newman, however, is not a shoo-in to succeed Mr. Sanford. Many observers say that Eugene Shanks, president, is the more obvious choice.

When Mr. Sanford announced in May that he would leave the troubled bank, Bankers Trust board member Hamish Maxwell said Mr. Shanks would be the "logical" successor to Mr. Sanford. "That statement still stands," a spokesman said Thursday.

Mr. Newman, 53, brings considerable banking experience to the new post. Before serving in the Treasury Department, he was chief financial officer at BankAmerica Corp.

While a Treasury official, he had been widely considered to be a candidate to succeed Richard A. Rosenberg as BankAmerica's chairman, but that contest was won last month by David Coulter, a BankAmerica vice chairman.

Mr. Newman "played one of the most crucial roles in the turnaround of BankAmerica," said senior banking analyst Thomas Hanley, of CS First Boston. "If there is anybody that can set an even hand at Bankers Trust over time and modify the culture, it is probably Frank Newman. He raised money for B of A in its darkest hours. He's an excellent manager and he has the highest respect of Wall Street analysts."

Named Treasury under secretary in 1993 by President Clinton's first Treasury Secretary, Lloyd Bentsen, Mr. Newman worked with the heads of the Federal Reserve Board, the Securities and Exchange Commission, and the Commodities Futures Trading Commission as part of the President's Working Group on Financial Markets. He also served as the under secretary for domestic finance.

Prior to his tenure at BankAmerica, Mr. Newman was chief financial officer of Wells Fargo Bank.

Mr. Newman's post at Bankers Trust is crucial as the company awaits the results of a federal probe into its sales practices.

Timothy Yates, who is currently Bankers Trust's chief administrative and financial officer, will report directly to Mr. Newman. Mr. Yates, like Mr. Sanford, is set to retire in the middle of next year.

While Mr. Newman said he was attracted to Bankers Trust because it was "an exciting place," analysts noted that his appointment would quiet speculation that the company was about to be sold.

"Frank Newman is a real strong hire," said Keefe, Bruyette & Woods analyst David Berry. "It's Bankers Trust's way of saying we want our reputation back."

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