Merrill Lynch’s board dealt fairly swiftly with Stan O’Neal. The $7.9bn mortgage-related loss was too large, and too badly handled for him to stay. Now, the board must act decisively again while avoiding an over-hasty decision on its new chief. Merrill is not about to fall apart, even though the big losses will have caused some concern among its retail client base.

Merrill ideally needs a heavy-hitting external hire to restore confidence, articulate a clear position on the bank’s risk appetite and improve risk management. That could take time.