DUBAI (Reuters) - Merrill Lynch & Co's chief executive expects emergency measures by US and international authorities designed to unfreeze lending will succeed, but said more pain awaited the financial sector.

Banks will need to raise capital and merge as the US economy sinks into recession and the fallout from the credit crisis could last for years, John Thain said yesterday. The crisis forced Merrill into the arms of Bank of America Corp. in a $50 billion deal. "It is likely to take multiple years to repair the damage that has been done," Thain said at a roundtable discussion in Dubai, part of the United Arab Emirates, and one of the Gulf Arab markets in which Merrill plans to expand its operations.

"This is not going to get better in three to six months," he said.

Governments around the world have pledged $3.3 trillion to remedy the worst financial crisis since the Great Depression, but volatile markets are also focused on the damage to the broader economy.