Bank of America spokesman Scott Silvestri declined to comment.

Thain's departure as head of global banking, securities and wealth management came less than a week after Bank of America took $20 billion of government capital to help absorb Merrill, whose soaring losses upset Kenneth Lewis, Bank of America's chief executive.

The government also agreed to share in losses on $118 billion of debt, and Lewis' own job status has come under question as Bank of America shares have tumbled..

"This is a huge crisis of credibility," said David Dietze, chief investment officer at Point View Financial Services in Summit, New Jersey. "Someone has to fall on a sword."

Tom Montag, another former Merrill executive who took over Bank of America's sales, trading and research operations, is also leaving, the business news channel CNBC said.

Other former Merrill executives who left previously include Robert McCann, who was to lead the combined brokerage, and investment banking chief Greg Fleming.

The departures essentially leave Lewis bereft of the top executives at Merrill, which Bank of America acquired on January 1 for $19.4 billion. Just a week ago, Lewis told investors he was happy that Thain was staying on.

CNBC also reported on Thursday that Thain incurred a $1.22 million bill a year ago to redecorate his Merrill office, including $35,115 for a "commode on legs" and $1,405 for a parchment waste can.

Such expenses would have followed $12.2 billion of net losses at Merrill in the second half of 2007 as writedowns on mortgages and other toxic debt began to mount. Thain became chief executive in December 2007.

The outlays recall heavy spending on personal items by senior executives at other companies, including a $6,000 shower curtain owned by former Tyco International Ltd chief Dennis Kozlowski, and an office fish tank acquired by former Citigroup Inc executive Todd Thomson.

HASTY MERGER

After joining Charlotte, North Carolina-based Bank of America, Thain became a candidate to succeed Lewis.

But there was speculation that he would not want to remain subordinate to Lewis, who is 61, for long. Before running Merrill, Thain was chief executive of NYSE Euronext

.

Bank of America threatened to scuttle the merger with Merrill in December after uncovering heavy losses on Merrill's books.

Lewis and Thain negotiated the merger in less than 48 hours, on the same weekend that Lehman Brothers Holdings Inc slid into bankruptcy. Thain has received credit for possibly saving Merrill from a similar fate.

Lewis has received much investor and analyst criticism for overpaying for Merrill and not renegotiating the terms once Merrill's losses became evident. Merrill lost $15.31 billion in the fourth quarter, Bank of America said.

Several lawsuits were filed this week against Bank of America, accusing the bank of rushing into the merger too quickly or failing to disclose the losses sooner.

Lewis has said top government officials pressed him last month to close the merger.

Bank of America shares were down $1.00, or 15 percent, at $5.68 in midday trade on the New York Stock Exchange.

(Reporting by Elinor Comlay, Jonathan Stempel and Dan Wilchins; editing by John Wallace)