Facing the prospect of a major write-down from its exposure to the sinking mortgage market, Merril Lynch dismissed two senior executives in its fixed-income division yesterday, the New York Times reports.
One executive who was dismissed, Osman Semerci, 39, the head of Merrill’s fixed-income division, had been in the position for little more than a year. Until the meltdown in the credit markets, he had been seen as a rising young star, the New York Times says. Also let go was Dale M. Lattanzio, who was the head of structured credit products, the center of many of Merrill’s recent investment problems.
The New York Times says the dismissals are the latest sign that investment banks, facing big losses after years of big profits, are moving quickly to hold senior executives accountable for having succumbed too readily to the credit and buyout boom. Recent examples include: Bear Stearns firing its co-president, Warren J. Spector, in August; Huw Jenkins stepping down early this week as the chief of UBS’s investment bank; and HSBC dismissing the head of North American business, Bobby Mehta.
Several banks have also reported large write-downs in the quarter, including Citigroup, which earlier this week recorded a 60 percent profit drop.