Merrill Lynch & Co reassigned top executives in its U.S. private-client group Monday, giving responsibility for global banking strategy to veteran John L. "Launny" Steffens and naming chief financial officer E. Stanley O'Neal to head its massive retail brokerage operation.

With the promotion, Mr. O' Neal - the highest-ranking African-American at Merrill - is regarded as one of four executives who could fill the vacancy left by Herbert M. Allison Jr., who departed last year as president and chief operations officer.

Mr. Steffens, who is also vice chairman, is to focus on Merrill's bid to participate in banking on a global scale, taking advantage of the financial services reform law enacted last fall. He also is to be a relationship manager for high-net-worth people and companies in the technology, biotechnology and telecommunications sectors.

"Given Launny's stature, the fact that he's going to spend more time with this banking initiative indicates how optimistic we are with its future for our clients and the company," said Merrill spokesman Richard T. Silverman.

Among recent initiatives within the private-client group are plans to go toe-to-toe with U.S. banks through the planned launching in March of an FDIC-insured version of its cash management account. Perhaps more controversial was its entrée into the on-line brokerage business in December, a move not initially favored by Mr. Steffens.

Around Wall Street, attention was focused on Mr. O'Neal, 48, given his placement on a short list of those eyed as possible successors to chairman and chief executive officer David H. Komansky, 60. At Merrill, the president's role has been viewed as preparation for the chief executive's post.

"The real story here is Stanley O'Neal," said Steven Eisman, an equity analyst at CIBC World Markets in New York. "He has a much bigger leg up now."

Mr. Allison left in July and is finance director of Sen. John McCain's campaign for the Republican presidential nomination.

In his new role as president of Merrill's U.S. private-client group, Mr. O'Neal succeeds Mr. Steffens, who also becomes chairman of the private-client group, a new post. Mr. O' Neal is to be responsible for Merrill's huge retail brokerage presence in the United States, a network boasting about 700 branch offices and 14,200 brokers.

Others considered leading candidates for president are: Winthrop H. Smith Jr., 50, president of the international private-client group and chairman of Merrill Lynch International; Jeffrey M. Peek, 52, president of Merrill Lynch asset management group; and Thomas W. Davis, 46, president of Merrill's corporate and institutional client group, which handles investment banking.

Mr. O'Neal, who has been Merrill's CFO since 1998, has worked in a number of areas in its investment banking unit since 1986; he is the first nonbroker to run the group. Thomas H. Patrick, who had headed Merrill's special advisory services, succeeds Mr. O'Neal as CFO.

Mr. Komansky recently indicated he will not choose Mr. Allison's successor for at least two years. Mr. Steffens had expressed no interest in the job, Mr. Silverman said.

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