Merrill Lynch’s board had little choice. The mortgage-related losses on Stan O’Neal’s watch were just too big and too cack-handedly dealt with to ignore. The $8bn man had to go. Even before his unauthorised conversation with Wachovia about a potential merger, the board had to face up to the inevitable. Mr O’Neal now looks poised to resign.

What happens next? A new chief executive is unlikely to be announced immediately. But the key for Mr O’Neal’s replacement will be to reassure investors, and the credit rating agencies, that he is in control of the firm’s risk management. An outsider, untainted by the recent debacle, sounds most sensible.