Wachovia Corp. shares tumbled on Thursday. It was the first day as the new CEO for Steel, former Treasury Undersecretary and Goldman Sachs Group Inc. executive, was hired late Wednesday to lead the Charlotte-based bank.

Even with an impressive resume and associations with people from Wall Street to Washington, Steel lacks experience in running a retail bank, Wachovia's main business. However, he could help steer Wachovia to a merger or outright acquisition.

Shares of Wachovia fell $1.16, or 8.1 percent, to $13.13 Thursday. Earlier in the session, shares hit a 17-year low of $12.65.  

On Wednesday, Wacovia said that it had put aside $4.2 billion to cover defaulting loans. It also said its second quarter loss would be between $2.6 billion and $2.8 billion, or $1.23 to $1.33 a share, excluding a goodwill write-down.

“There’s work to be done,” Steel told analysts on a conference call. “There are some challenges,” Steel said. “I can pledge to you that we're going to deal with them head on.”

Steel, who has been the Treasury Department's liaison with Wall Street since the fall of 2006, has played a major role in the Bush administration’s response to the nation’s housing and credit crisis.

Lanty Smith, who remains Wachovia's chairman after serving as interim CEO, called Steel "our one and only choice" for the top job at Wachovia.