Merrill Lynch's pre-tax profits from global markets and investment banking this year have been all but wiped out after the Wall Street bank wrote down $7.9bn (€5.6bn) of its collateralised debt and sub-prime mortgage-related exposure in the third quarter.

The hit was 75% higher than the bank's estimate three weeks ago. Merrill Lynch warned on October 5 it would write down $4.5bn at its fixed income, currencies and commodities trading unit from its exposure to collateralised debt obligations and US sub-prime mortgages.