Merrill CEO says has tackled biggest problems: report

MADRID (Reuters) - U.S. bank Merrill Lynch & Co MER.N has overcome its most serious problems stemming from the global credit crunch but has not eliminated all, its chief executive was quoted as saying.

In an interview with Spain's El Pais newspaper published on Sunday, Merrill CEO John Thain also reiterated recent comments that Merrill would not need to seek more outside capital to bolster its balance sheet.

The bank announced a $9.83 billion loss for the fourth quarter, the worst in its 94-year history, reflecting about $16 billion of mortgage-related write-downs and adjustments.

"Our balance sheet still has some risk positions, so we still haven't eliminated them completely but none of these positions is of a magnitude that we saw at the end of the last quarter," Thain said in the March 6 interview -- the same day the bank said it would cut 650 jobs as it stopped making subprime mortgages via its First Franklin Financial Corp unit.

"We have carried out an enormous cleaning of our credit portfolio. We have more capital than we need, so we can say to the market that we don't need more injections. We can confirm that we have tackled the problem."

Although difficult to estimate how long the credit crunch would last, Thain said he thought it would continue for "at least" another six to 12 months.

Merrill's CEO added that, in his view, the U.S. Federal Reserve's series of interest rate cuts would do little to help the financial sector.

"The problem is not the price of money but the availability of credit and the lack of confidence. As such, to merely lower interest rates is no use at all".

(Reporting by Ben Harding; Editing by Jason Neely)