NEW YORK | The unfolding credit crisis has claimed its biggest corporate casualty so far: Merrill Lynch CEO Stan O'Neal.

The announcement Tuesday that O'Neal is retiring immediately came after the world's largest brokerage posted a $2.24 billion quarterly loss, its biggest since being founded 93 years ago. While a Merrill Lynch & Co. spokeswoman said O'Neal will receive no severance package, he could walk away with retirement benefits and stock awards worth more than $160 million.

Merrill Lynch did not name a replacement for O'Neal, whose ouster had been expected for days. Instead, board member Alberto Cribiore will step in as interim nonexecutive chairman and head the search for a new CEO. Cribiore, appointed to the board by O'Neal in 2003, founded private-equity investment firm Brera Capital Partners in 1997.

Despite the third-quarter loss, analysts consider the vast majority of Merrill's business to be in perfectly fine shape. But, whoever replaces O'Neal will have to clean up the segment that is not in good order -- Merrill's investments in subprime mortgages and other risky types of debt.

Merrill Lynch warned in early October it would report a loss after taking a writedown of some $4.5 billion, blaming the declining value of bonds and other instruments backed by mortgages made to people with spotty credit. But it stunned Wall Street when, less than three weeks later, it acknowledged the writedown was actually $7.9 billion. O'Neal accepted blame for the discrepancy, which immediately led to calls for his ouster.

O'Neal, 56, who rose to power five years ago, was known for shaking up top management and putting a greater emphasis on riskier bets, rather than the safety of just selling stocks.

That strategy -- which handed Merrill Lynch record results during the market's peak -- came with a heavy cost during the tumultuous third quarter.

With his retirement, he becomes the biggest executive casualty of the credit crisis that swept global markets this summer. Within minutes of announcing his departure, O'Neal's profile on the brokerage's Web site was wiped.

"Mr. O'Neal and the board of directors both agreed that a change in leadership would best enable Merrill Lynch to move forward and focus on maintaining the strong operating performance of its businesses, which the company last week reported were performing well, apart from sub-prime mortgages and CDOs," Merrill Lynch said in a statement.

CDOs, or collateralized debt obligations, are complex instruments that combine slices of different kinds of risk. It was Merrill's bet on CDOs, and the subprime mortgages underpinning many of them, that proved to be O'Neal's downfall.

Analysts have said this week that whoever replaces O'Neal may have to write down another $4 billion worth of bad investments in the fourth quarter.

In the meantime, co-presidents and chief operating officers Ahmass Fakahany and Gregory Fleming will continue in their current positions. However, their duties will be split -- with Fleming in charge of Merrill's front-line businesses, such as its brokerage and investment banking sides.

Fakahany, a close confidant of O'Neal, will lead back-office functions such as finance and human resources.

Robert McCann, the president of the company's massive global wealth management group, was not named in the power-sharing agreement. He has been tipped as a potential long-shot candidate to take O'Neal's job. Fleming is also considered a possible internal candidate.

Among those said to be considered for the job outside the firm are NYSE Euronext CEO John Thain and BlackRock Inc. CEO Laurence Fink.

O'Neal is the descendant of a former slave who grew up in poverty in Alabama before rising to become one of the highest-ranking African-Americans on Wall Street. He worked his way through a Harvard business degree by working at General Motors Corp., and in 1986 joined Merrill as a banker in its junk-bond department.

His elevation to CEO was seen by some as an experiment by the company's board, most of whom have since retired. O'Neal mostly held positions on the client-contact side, which goes against the trading background most of its other CEOs had.

O'Neal, who spent 21 years at the firm, was paid roughly $48 million salary in 2006.