US Treasury undersecretary Robert Steel is set to takeover the reigns of Wachovia as the bank's new chief executive. The fourth-largest bank in the US has finally brought to a close its six-week quest for a new man at the helm after Ken Thompson was sent packing by the bank's board in June (See: US fourth-largest bank Wachovia fires CEO as losses mount; may be takeover target).

Thompson lost his job as Wachovia CEO due to a series of 'missteps', such as his decision to acquire mortgage lender Golden West Financial Corp in 2006 for around $25 billion at the height of the nation's housing boom.

The bank also warned that it had provisioned $4.2 billion pre-tax against bad loans for the quarter. Its estimated second-quarter loss ranges between $2.6 billion to $2.8 billion, amounting to $1.23 to $1.33 per share, not counting an expected write-down of goodwill, when Wachovia releases its second-quarter earnings on 22 July.

The 56-year old undersecretary has been the Treasury department's liaison with Wall Street since 2006, and has announced his resignation, which will be effective immediately. Steel has previously worked with investment bank Goldman Sachs, and is chairman of the board of trustees at his alma mater, Duke University. Wachovia's chairman and interim CEO Lanty Smith will continue to be the bank's chairman) (See: US fourth-largest bank Wachovia fires CEO as losses mount; may be takeover target. 

Smith too has Duke University as his alma mater, having earned his law degree there, and having served on the board of trustees from 1997 to 2003. The camaraderie was evident in Smith's statement to The Associated Press, saying, ''We love Bob's background. He has deep expertise in financial services, the experience in Washington with government, is somebody that's really smart and can look at things from an intellectual point of view and can also get in the weeds and really understand details and manage quite effectively."

Wachovia said that all business and staff units would report to Steel, and interim chief operating officer Ben Jenkins would continue as vice chairman and head of the general bank.

Steel's appointment quells market talk about Wachovia being an impending acquisiton target, though starting an alternative channel of blabber that uses his prior experience at Goldman Sachs to question the relationship between Wachovia and Goldman Sachs, which was earlier rumoured to be a prospective acquirer. Wachovia had hired Goldman Sachs to analyse its troubled loan portfolio just last month.

Though Steel's resume is impressive, sources point out that he lacks experience in running a retail bank, which is essentially Wachovia's forte. Steel terms his experience as ''team-oriented, collaborative management'', something he learned from ''30 years at Goldman Sachs.'' Steel started out at Goldman in Chicago in 1976, moving 10 years later to London where he laid the foundations for the firm's European equity capital markets group. He moved back to the US to New York in 1994, running the overall firm's equities division, and was appointed a vice chairman in 2002. He left Goldman in 2004.

When Goldman chief Henry M Paulson Jr. was named teh 74th secretary  of the US Treasury in 2006, he brought Steel with him to be undersecretary for domestic finance. Steel describes his goal at Wachovia as ''to encourage people to use their skills to figure out the right answers by evaluating and developing a discussion."

Wachovia's stock has dropped 72 per cent over the past year, as a result of billions of dollars in losses from bad loans extended during the housing boom.