INSTANT VIEW: Former Merrill head Thain out at BofA

NEW YORK (Reuters) - Former Merrill Lynch Chief Executive John Thain has resigned from Bank of America Corp which recently acquired Merrill, effective immediately, a Bank of America spokesman said on Thursday.

The shakeup, which follows a report on CNBC about lavish spending by Thain redesigning his office at Merrill Lynch, is the latest earthquake to hit Bank of America, which earlier this month had to seek a government rescue.

Bank of America shares were down 11 percent in early afternoon trading, making it one of the worst performing bank stocks on a day when the sectoral KBW Banks index was down 6.1 percent.

The following are reactions from industry analysts and investors:

DAVID DIETZE, CHIEF INVESTMENT OFFICER, POINT VIEW FINANCIAL SERVICES, SUMMIT NJ

"This is a huge crisis of credibility at arguably America's largest bank.

"(Losses at Merrill) were not disclosed on a timely basis to shareholders ... someone has to fall on a sword.

"I guess it's not going to be Lewis -- in fairness to him, it wasn't his company being bought, it was Thain's."

WILLIAM SMITH, CEO OF SMITH ASSET MANAGEMENT, NEW YORK