The resignation of Chuck Prince as chairman and chief executive of Citigroup, a week after that of Stan O’Neal at Merrill Lynch, shows just how much damage the credit squeeze is doing. The loss of two heads of Wall Street banks has turned 2007 into the industry’s most traumatic year since the 1987 crash.
Other downturns, including the bond upheaval of 1994 and the collapse of Long-Term Capital Management in 1998, prompted reappraisals of banks’ trading risks. But this year’s write-downs and resignations (or retirements, as they are termed in Mr Prince’s and Mr O’Neal’s case) will cast a longer shadow.
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