Morgan Stanley’s Strategy Was Validated in Second Quarter: Gorman

published on July 19, 2020

Let's just talk about the moment we're in at some point you look around and realize the world has changed and you need to adjust your strategy accordingly whether it's geographically or the business mix you made that decision

Coming out of the last crisis does this crisis validate your response last time around or do you need to make some changes again well you know firstly uh jonathan thanks for

Having us on the show um you know clearly the perform what we designed was a business that in times of severe stress would be fine and when markets are very active and volatile

Uh we would still perform very well across the whole investment banking franchise this was that crisis and that's what we delivered with the 15 plus percent roe so

I think it validates the strategy but it's our strategy it's not for everybody this is what we chose we didn't want to be credit heavy we want to be flow based fee based asset based and that's what we

Are james it's been a strong argument over the last week we've heard from several ceos of wall street institutions on this program that we haven't fully realized the risks around this recession that fiscal policy

Has made it more difficult to assess creditworthiness and there's going to be more pain in the months ahead james would you characterize things a little bit differently

Well for the economy it's very hard to tell i mean it depends on you know how quickly the uh covert outbreak that we're seeing across the south and southwest uh subsides uh how well people coming back

To their place of work functions uh continued liquidity and stability in the market so it's it's too early to tell but you know we're not a credit centric institution so for us it's less relevant

But for the marketplace until people get back to work you're going to have consumer credit problems there's no question about that

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