INSTANT VIEW: Merrill Lynch CEO O'Neal leaves firm

NEW YORK (Reuters) - Merrill Lynch & Co Inc MER.N on Tuesday said Chairman and Chief Executive Stan O'Neal retired and named board member Alberto Cribiore to serve as nonexecutive chairman, the company said.

O'Neal, 56, became CEO of the world's largest brokerage in 2002, but lost the confidence of Merrill's board after the company wrote down $8.4 billion in assets.

The following are market comments on the departure:

COMMENTS:

DAVID KILLIAN, PORTFOLIO MANAGEMENT, STONERIDGE INVESTMENT

PARTNERS LLC, MALVERN, PENNSYLVANIA

"It's no big surprise. Merrill Lynch had a huge misstep in risk management, and someone needed to pay the price. The company totally lost its way in risk management. For a company with a $50 billion market value with $20 billion in exposure to CDOs, with more losses likely, it has been far more exposed to riskier assets than most of its peers.

"It needs to consider how to manage this, and perhaps consider a sale to a large organization with a balance sheet sufficient to stomach future charges. It needs a CEO with a strong risk management background. Larry Fink would be an excellent candidate, because no one has a better risk management reputation than BlackRock."

BILL ANDREWS, AN ANALYST AT INSTITUTIONAL MONEY MANAGER

C.S. MCKEE IN PITTSBURGH

"In the short run, it's not going to change anything with regard to Merrill. Over time they have issues they have to work through, regardless of who's running the firm. In the long run of course, the key is who do they get."

"There doesn't seem to be any rhyme or reason for moving one of the guys out. I'm going to be surprised if they hire (co-President Greg) Fleming as a CEO. That would not be well received; they really need somebody from the outside."

"Stan did accomplish a lot of good things. I don't think his tenure was an abject failure. But Stan doesn't like a lot of debate. People who don't agree with him, no matter how talented they are, weren't around long. That's his Achilles heel.

"There (are) a lot of talented people on Wall Street with big egos. You have to deal with that; you can't get rid of everybody who disagrees with you."

BLAKE HOWELLS, DIRECTOR OF RESEARCH, BECKER CAPITAL

MANAGEMENT, PORTLAND, OREGON

"I'm not surprised. People were anticipating him to step down, and the board had to make a change. Investors had lost confidence in O'Neal. Writeoffs were expected, but the company said it would be $4.5 billion, and just a few weeks later they took a much bigger writedown, which made investors less confident that Merrill had its arms around the problem.

"Getting the announcement out there and making the change helps stabilize Merrill in the near term, and they can focus now on what needs to be done."

WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY

MANAGEMENT, IN SALEM, MASS.

"It was sort of expected: that's the first part. The second part is how they go about the change."

"I am looking at it from a bond investor standpoint. This particular CEO took a little bit too much risk and has now hurt the liquidity of the company.

"I am looking at it as a positive. I am sure now they will put proper controls in place on how the management will manage the firm of the future."

TOM SOWANICK, CHIEF INVESTMENT OFFICER OF CLEARBROOK

FINANCIAL LLC IN PRINCETON, NEW JERSEY, AND A FORMER MERRILL

LYNCH WEALTH MANAGEMENT STRATEGIST

"This is an easy temporary solution. Keeping standing executives in place until a new CEO is found, the next decision will be whether to separate the board's chairmanship and CEO function which we have learned is a prudent management decision.

"It is likely the structured fixed-income product group will face contraction, as the business is forced to shrink."

CHARLES LIEBERMAN, CHIEF INVESTMENT OFFICER, ADVISORS

CAPITAL MANAGEMENT, LLC, PARAMUS, NJ

"Everyone's been expecting that, and I think people believe it's appropriate...(but) going forward, there's still concern about writedowns, and that still needs to be settled. I think there's still reason to be nervous about the situation. It's far from resolved as yet."

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO

"This is a stock-specific story. Obviously, Merrill's stock has had a huge run in anticipation of this. So, now we now actually have the news but it's still not clear who's going to be the CEO.

"So, it's sell on the news. Uncertainty is not the best thing."

(Reporting by Caroline Valetkevitch, John Parry, Dan Wilchins, Jonathan Stempel, Joseph Giannone, Jennifer Ablan and Ellis Mnyandu)