Gold News

Merrill Lynch CEO pending, bad debt revealed

Markets were awaiting news from Merrill Lynch today, as the company looked set to part company with its troubled chief executive.

Newspapers have suggested that an announcement will come early this week, with chief executive Stan O'Neal set to depart after 'mistakes' were made by the group in relation to housing debt.

The current controversy underlines that Merrill Lynch has become one of the key causalties of the housing market crisis in the US, with rumors of O'Neal's imminent departure coming amid admissions of $7.9 billion exposure to bad debt.

Record loan defaults in the sub-prime mortgage sector are said to have left the financial group over-exposed, forcing the write-off of substantial debt and net third quarter losses of $2.3 billion.

Mr O'Neal recently admitted problems at the firm:"I'm not going to talk around the fact that there were some mistakes that were made."

Speculation over a change of leadership at Merrill Lynch helped to drive the Dow Jones industrial index 134 points up on Friday, but revelations about the company's bad debt burden could signal a deeper than expected fall-out from sub-prime on US markets.


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