voa economic report - Finance: Merrill Lynch CEO O'Neal Is Out After Huge Loss

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is the VOA Special English Economics Report. This week, of investment bank Merrill Lynch forced out its chief officer, Stan ONeal'. He retired less than a week Merrill reported its first quarterly loss in six years, the biggest in its ninety-three-year history. Merrill is the largest brokerage company. It lost over two billion dollars the period from July through September. That was because more than eight billion dollars in write-downs-. A write-down a reduction in the value of investments or other . The results were mostly related to subprime mortgages ---- loans to people with risky credit histories. Merrill has the largest losses so far of any American bank investments tied to subprime loans. Many of these investments complex securities called collateralized debt obligations. Merrill had almost billion dollars in write-downs on CDOs and subprime mortgages. was even more than the four and one-half billion expected. Its other divisions, however, remained profitable. Stan ONeal for Merrill Lynch for twenty-one years. He held the job since two thousand two. Board members were angry the losses and at reports that he proposed a deal with Wachovia Bank without their approval. He chose of the members of that board. Critics say he to listen to warnings about the risk of subprime . Yet his decisions to make riskier investments than chief before him helped produce record profits for the company. also pushed to reduce costs, including thousands of job ---- a culture change for a company that was as "Mother Merrill." He leaves with about one hundred million dollars worth of stock and retirement pay. Stan was the first African-American to lead a major Wall investment bank. He rose out of poverty. As a he picked cotton on a family farm in Alabama. he was a factory worker at General Motors. Some watchers think Merrill Lynch may have to write down additional four billion dollars in the fourth quarter of year. But the company was not alone in reporting third-quarter losses. In Europe the investment bank UBS said lost about seven hundred million dollars. It wrote down than three billion dollars of investments linked to subprime . And UBS warned that it could end the year more losses. And that's the VOA Special English Economics . I'm Mario Ritter.

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