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Sub-Prime Troubles Cause Big Losses, Change of Leadership at Merrill Lynch

The head of Merrill Lynch, the world's largest brokerage firm, is "retiring" just a week after reporting the largest quarterly loss in the company's 93-year history.

Stan O'Neal was chief executive of Merrill Lynch for five years, and got into trouble when large investments in sub-prime mortgages went sour. The firm lost more than $2 billion in the third quarter.

Meanwhile, Europe's largest bank, UBS, says it also was hit by sub-prime problems, losing more than $700 million for the quarter.

Banks that loaned money to home buyers with poor credit and investors who bought up securities backed by the shaky mortgages, have lost tens of billions of dollars in recent months as rising interest rates and falling home prices sparked a wave of defaults.

Some information for this report was provided by Reuters.