Mr Thain listed raising capital to manage losses as one way investment banks can survive. Financial companies have been forced to find outside investors after taking nearly US$300 billion (S$412 billion) in write-downs since last year from bad mortgage debt.
He said there will continue to be interested investors, and pointed to Lehman Brothers Holdings. The brokerage on Monday announced that it raised US$6 billion in new capital after posting a nearly US$3 billion second-quarter loss.
Lehman has been 'raising capital to make up for the losses, and I wish them well,' Mr Thain said.
'We all have concerns about what we read in the papers,' he said, speaking at a conference in New York sponsored by The Wall Street Journal.
Mr Thain said that consolidation 'has been a process on Wall Street.'
He believes weaker firms will be snapped up as in the past, but warns that bigger companies are not immune to being broken up.
'Some can get too big,' he said.
There have been calls that Citigroup might consider splitting parts of its business to find greater efficiency. There has also been speculation that JPMorgan Chase - after its recent acquisition of a near-collapsed Bear Stearns - might be looking to expand its retail bank.
As for managing Wall Street's risk levels, Mr Thain said Merrill continues to diversify overseas. He also doesn't see an end to the nation's housing crises or the risky mortgage-backed securities tied to souring home loans.
'Retail mortgage-backed securities are still going to be problems as housing prices continue to fall,' he said. 'The problem in the housing market will continue for some time.' -- AP