STIFF, cerebral and intimidating, John Thain is not a “people person”. Behind his back his nickname is “I Robot”.

Clubbable Thain may not be, but his record for turning round troubled institutions has made him the hottest property on Wall Street.

In a surprise move last week, Merrill Lynch appointed Thain as its new chief executive. The 52-year-old doctor’s son and electronic-engineering graduate is the first outsider to have taken control of Merrill. The bank has traditionally promoted from within but was forced to look for fresh talent amid one of the worst crises in its 93-year history.

Earlier this month, Merrill announced its largest-ever quarterly loss of $2.2 billion (£1.1 billion) for the third quarter.

Merrill has lost $8.4 billion in the recent credit crunch, much of it relating to sub-prime mortgages. The group is expected to write down as much as $10 billion in further such losses. The debacle cost Merrill’s former boss, Stan O’Neal, his job.

For some, Thain’s appointment signals wider changes on Wall Street. Along with “big-pic-ture” thinking, bank bosses are now expected to bring greater scrutiny and hands-on expertise to their jobs.

Thain is a former Goldman Sachs veteran and, until December 1, boss of the New York Stock Exchange (NYSE). Tellingly, he was also in the running for the top job at Citigroup, which also lost its chief executive, Charles “Chuck” Prince, after huge losses on sub-prime loans.

All the leading banks have been racked to some extent by the credit crisis, but some have been hit harder than others. Goldman Sachs, led by Lloyd Blankfein, has notably escaped the worst of it.

Like Blankfein, Thain is a technician as much as a leader. Merrill is still reeling from its sub-prime home-loan losses. It is a business Thain knows inside out, having run Goldman’s mortgage desk from 1985 to 1990.

With Thain’s appointment, Goldman’s influence grows ever wider. His successor at the NYSE will be Duncan Nieder-auer, another Goldman executive. Other former Goldman chiefs include Treasury secretary Henry “Hank” Paulson; Robert Rubin, chairman of Citigroup; governor Jon Corzine of New Jersey; and Joshua Bolten, White House chief of staff.

This is the second time in four years that Thain has been called on to clear up after a storm. In December 2003 he took the top job at the NYSE after the messy departure of its former boss, Richard “Dick” Grasso.

Grasso was chased out after it was revealed he had received a $140m pay and bonus package. At the time, the NYSE was a quasi-governmental body. It was losing out in the technology race to rivals like Nasdaq and the London Stock Exchange and had yet to become a public company.

Thain’s appointment signalled huge changes for the NYSE. The man from Goldman began taking an axe to convention and bureaucracy. In an interview shortly after his appointment, Thain revealed that when he first got there, someone brought him a form to hire a secretary five layers down in the organisation. “Why is this coming to me?” said Thain.

For a while Thain shunned the opening and closing-bell ceremonies at the exchange, something Grasso loved, but he seems to have warmed to them as a useful marketing tool.

The banker forced the exchange to update its systems through a merger with Archipelago, an electronic rival. That merger also made NYSE a public company, opening up the exchange to a level of scrutiny it had never known before and giving its members a tradeable stake in the exchange.

The third part of Thain’s campaign was to increase the NYSE’s presence abroad. This year, Thain completed the acquisition of Paris-based Euronext, seeing off a bid by Frankfurt’s Deutsche Börse that many European politicians had preferred.

The robot jokes remain, but many on the exchange, especially those holding shares in NYSE Euronext, have done well under his careful eye. NYSE Euronext shares have gained more than 30% since they were first sold to the public last year.

Within Merrill, Thain’s appointment was a shock. O’Neal had been an unpopular and divisive boss and many had hoped his replacement would be Larry Fink, the chief executive of Black Rock. This is a large asset-man-agement firm that has been a huge success for Merrill. The bank owns about half of Black Rock and Fink is seen as one of its greatest assets. He is also a widely liked manager who has extensive expertise in the fixed-income area, a black spot for Merrill and other banks in recent years.

Thain has no experience of dealing with a firm with a sales force of 15,000 retail brokers. But nor did he have any experience of juggling traders, pension funds, regulators and politicians when he joined the NYSE.

Rivals and insiders are betting on a round of bloodletting at Merrill, which employs 64,200. Thain’s ruthless streak goes back to his days at Goldman Sachs, where he was instrumental in the ousting of his mentor, Jon Corzine.

So far the news has been good for Merrill. Analysts at Credit Suisse upgraded the bank to “outperform” from “neutral” after the management change. Shares of Citi, however, sank on disappointment that it had failed to secure the services of the I Robot.

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