When asked about Merrill's problems, Thain said he had "complete access to all their books and records."

"I've talked to them a lot about their exposure to the...subprime market," he added, "and they've been as open as they could be."

Thain also said Merrill "did a great job" in evaluating their subprime exposure but indicated further writedowns are possible.

Thain has a blue-chip Wall Street resume, with credentials sharpened by running NYSE and his time as a former co-president at Goldman Sachs.

Thain took over the NYSE in January 2004 after longtime CEO Richard Grasso was forced to resign over his $188 million pay package. Thain sought to present a new image for the exchange and pushed through some major structural changes, including the move to electronic trading.

Thain had also been rumored to be a possible CEO candidate for Citigroup , whose chief executive Chuck Prince also stepped down following big subprime-related losses. No replacement for Prince has been named.

Created Global Exchange

Thain, who is credited with remaking the NYSE into the world's first truly global exchange, is no stranger to the investment world. He started out on the bond desk at Goldman Sachs and left the firm as its chief operating officer.

Many say he's also exactly what Merrill Lynch needs after last month's ouster of Stan O'Neal. The former CEO was not well liked by Merrill's army of some 16,000 brokers, and lost their confidence after the company recorded its biggest loss since being founded 93 years ago.

Merrill Lynch ratcheted up a $2.24 billion loss during the third quarter because of investments in subprime mortgages and other risky types of debt. It joined dozens of other major financial institutions who are getting squeezed as investors steer away from riskier securities, causing credit markets to tighten significantly.

There is also speculation by a number of analysts that Merrill may take a $3 billion fourth-quarter writedown. That would be besides the $7.9 billion charge taken last quarter. Merrill originally said it would write down only $4.5 billion because of the credit crisis.

Faces Daunting Task

Thain faces a daunting task of cleaning up those investments, and reviving morale at a firm badly bruised during the past few months. There has been speculation that a new CEO would be forced to turn around Merrill's fixed income division, a department that he once ran for Goldman in the 1990s.