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US investment bank Lehman Brothers has reshuffled its senior management as speculation about overseas interest in the firm continues.

Eric Felder and Hyung Soon Lee have been named global co-heads of fixed income following the departure of current global head Andrew Morton.

The bank also appointed Riccardo Banchetti and Christian Meissner co-chief executive officers of Europe and the Middle East and announced that Jeremy Isaacs will retire as chief executive officer for Europe, the Middle East and Asia-Pacific at the end of the year.

A potential rescue from South Korea for the troubled US investment bank appeared to have lost further momentum today but other possible investors continued to circle.

South Korea's top financial regulator called on state-owned Korea Development Bank (KDB) to carefully weigh its potential investment in the subprime-hit bank.

“Considering financial market conditions domestically and abroad, KDB should approach buying into Lehman at this point of time very carefully,” Jun Kwang-woo, chairman of the Financial Services Commission, told reporters at a briefing.

KDB, headed by the former chairman of Lehman's South Korean branch, is considering an investment with other domestic banks reportedly worth up to $5.3 billion.

Doubt over the prospect of a South Korean lifeline emerged last week, when KDB said it was unsure there would be a deal and other lenders denied interest in taking part.

The commission's move followed news of a senior management reshuffle at Lehman that saw the appointment of two executives to head the bank's fixed income operations.

Separately, Japanese newspaper Yomiuri Shimbunreported on Saturday that Nomura Holdings is considering acquiring a stake.

Japan's Nomura has a pool of funds exceeding 200 billion yen ($1.86 billion) for investing in or acquiring US and European financial institutions, the brokerage's chief executive, Kenichi Watanabe, told Yomiuri Shimbunin an interview.