In a release, Citi CEO Vikram Pandit says Parsons is "already an invaluable asset to Citi. He is an outstanding business leader with a broad and deep understanding of the banking industry. With his proven record of turning around Dime Bancorp and Time Warner, as well as his work with a wide range of government regulators, Dick is uniquely qualified to lead the Citi board and help guide the company's strategic corporate realignment into two distinct operating units." Pandit says Parsons will play "an integral role in helping us place Citi back on the right track and returning the company to a position of sustainable financial success."

The announcement comes a week after Citi split into two operating units to focus on its core businesses, including corporate and investment banking, while winding down some of the less profitable ones. Parsons, who comes to the board's chairmanship from a role as lead director and chair of its nomination and governance committee, had served as Dime's CEO in the early 1990s. He worked with government regulators to enable the bank to continue as a private sector enterprise. Before that, Parsons was managing partner of law firm Patterson, Belknap, Webb & Tyler, and in the 1970s was a senior White House aide.

Meanwhile at the troubled Merrill Lynch--recently taken over by Bank of America--former chairman and CEO of Merrill, John Thain, has resigned. Thain was reportedly in line to become president of Global Banking, Securities and Wealth Management at the completion of the BofA merger. In December, Thain eventually abandoned a public battle with Merrill over a $10-million bonus. Merrill Lynch did not return requests for comment by deadline.