LEHMAN BROTHERS executed a sudden management shake-up yesterday, ousting its long-serving president and demoting its chief financial officer following a $2.8 billion second-quarter loss that raised questions about its future as an independent bank.

The moves are the latest in a wave of management changes across Wall Street as banks that soared to record profits in recent years plunged into losses following enormous asset write-downs and trading failures.

Analysts yesterday said it was not clear whether the moves by Lehman would be enough to relieve the pressure on Dick Fuld, chief executive.

Lehman said it would replace Joe Gregory, president since 2004, with Bart McDade, head of its equities division.

Erin Callan, who became the top-ranking woman on Wall Street when she took over as finance chief in December, will be replaced by Ian Lowitt, co-chief administrative officer.

Ms Callan will return to investment banking.

If he survives, Mr Fuld is expected to face pressure to find a buyer for Lehman, which remains more dependent on US fixed-income than its rivals.

The bank has been hammered by short-sellers, notably David Einhorn of Greenlight Capital, who argue that it remains under-capitalised and has not properly accounted for its large mortgage-related assets and other holdings.

These short-sellers believe Lehman could be susceptible to the same kind of collapse that led to the demise of Bear in March.

Lehman shares dropped 2 per cent to $23.28 in early trade.