Merrill Lynch has pulled out of talks to locate its headquarters at the new World Trade Center after suffering billions of dollars of write downs.

Merrill had been expected to take one of three buildings in development by Larry Silverstein at the World Trade Center.

The decision to hold off on building offices – at a likely cost of as much as $3bn (€1.9bn, £1.5bn) – is the second time in less than a year that the troubled investment bank has vetoed new headquarters. It had also been considering building on the site of the Hotel Pennsylvania in midtown Manhattan but opted out of that plan shortly after Stan O’Neal stepped down as chief executive following $8bn in mortgage writedowns.

The bank is in discussions to stay in its existing World Financial Center headquarters until 2018, an additional five years on its lease.

Financial Times