With bank after bank writing off billions of dollars of losses and the credit crunch settling in for a tighter and tighter grip on the US economy, investors and economists alike are beginning to ask questions.
One of the most perplexing is whether or not the horrific mismanagement of risk was avoidable. Were managers hit with situations they simply could not foresee? Were the risks being taken obviously-ominous? Did managers take them anyway in the hopes of miraculously coming out of them unscathed?
Evidently, some of the information on CFO.com would lead many to ask those very questions about Merrill Lynch CFO Jeff Edwards.
After telling investors this past July that the bank’s subrprime exposure was “limited, contained, and appopriately marked”, Merrill Lynch wrote off more than $8 billion in third-quarter subprime write-offs.
There are some who think that the CFO should be forgiven for his managerial errors, but there are far many more who think otherwise.
Edwards has offered to resign after learning of CEO Stanley O’Neil’s voluntary retirement. The offer was ultimately rejected by the board but the bank's growing financial woes, an investigation by the Securities and Exchange Commission, and a class-action lawsuit alleging that Edwards and others failed to disclose a "ticking time bomb" do not bode well for the finance chief.
"He has been well regarded within Merrill and on the Street, but the board will have to evaluate the overall financial management under his leadership in relationship to this issue," says Barry Bregman, a partner at executive search firm CTPartners.

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