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“If I get hit by a gorilla” Dick Fuld once told the Financial Times, Joe Gregory, Lehman Brothers’ chief operating officer, “is the man who takes over.”

No longer. While Mr Gregory’s boss has so far dodged any dust-ups with large primates, his bank has been savaged by a gorilla of a different kind: the credit crunch. Mr Gregory has now been demoted. Meanwhile, Erin Callan, Lehman’s chief financial officer of just six months, is being sent back to endure some funny looks on the investment banking floor.

Something, or someone, had to give. On Monday, Ms Callan delivered the news of dreadful quarterly losses and a $6bn capital raising. Lehman hoped to quell talk comparing it to Bear Stearns. It did not work. On Thursday morning, its shares were trading 15 per cent below the $28 investors had paid in the latest equity issue.

The shake-up indicates the level of pressure Mr Fuld is under to restore credibility. However, coming after so many defiant messages against Lehman’s naysayers, it sends a mixed message. On the one hand, heads have rolled, so something is being done. On the other, sudden moves like this raise the question: is there worse news that we do not know?

That uncertainty is Lehman’s central problem. Having raised new money and with the Federal Reserve’s credit facility to hand, a Bear-like meltdown looks unlikely. However, there are still too many unanswered questions regarding the estimated $65bn of troublesome assets still sitting on Lehman’s books, such as the marks taken on various property investments.

Mr Fuld says he wants Mr Gregory’s successor to lead Lehman “to the next level”. But at this stage, just finding a stable level would be nice. More transparency on the balance sheet would be a good start.

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