Merrill Lynch has named NYSE Euronext Chief Executive John Thain as the new CEO of the company. Viewed as an outsider, Thain is a product of one of Merrill’s major competitors Goldmans Sachs. One of his chief tasks will be to repair an image damaged by the subprime debacle.

Prior to Thain, the CEO was Stan O'Neal, who ceased to be the Chairman and CEO of Merrill late last month. This occurred after the company wrote down $8.4 billion (4.1 billion pounds) during the third quarter in terms of assets.

Before Thain joined NYSE in 2004, he was a Goldman Sachs senior executive for many years. Thain, however has no experience in operating a large retail brokerage similar to Merrill; Merrill has over 15,000 brokers.

According to Deutsche Bank analyst Mike Mayo, the target is to achieve the heads of the private client business as well as the more senior brokers in committing to the new management.

Merrill has confirmed that Thain's appointment is to be effective from December 1, and certainly one of his first tasks will be to assess the risk management procedures of Merrill. According to the analysts, Merrill's risk management procedures had failed to evaluate the exposure to subprime mortgages as well as collateralized debt obligations.

Thain has told CNBC television that Merrill needs to manage its risk properly and that he is not to quit the CDO and mortgage markets. He further added that more write-downs were possible in the financial services industry owing to continued pricing pressure.

David Katz, chief investment officer at Matrix Asset Advisors in New York, has expressed his faith in Thain as a very good unifier, team builder and operator.