
Morgan Stanley (NYSE:MS) CEO James Gorman said on Friday he plans to step down as CEO this year.
The bankās board has narrowed its CEO search to three āvery strongā internal candidates, Gorman said.
Morgan Stanleyās CEO candidates are the men leading the bankās three main businesses: Ted Pick, Andy Saperstein and Dan Simkowitz, according to people with knowledge of the matter, per CNBC.
Gorman will still take on the executive chairman role āfor a period of timeā after stepping down as CEO, he said.
āThe specific timing of the CEO transition has not been determined, but it is the boardās and my expectation that it will occur at some point in the next 12 months,ā Gorman said.
āThat is the current expectation in the absence of a major change in the external environment,āĀ he continued.
Morgan Stanley’s CEO’s resignation comes after several banks have begun to experience turmoil in the banking sector.
After the collapse of Silicon Valley Bank and Signature Bank in March and First Republic Bank in April, a study on the fragility of the U.S. banking system found thatĀ 183 more banks are at risk of failureĀ even if only half their uninsured depositorsāthose with deposits greater than $250,000ādecide to withdraw their funds,Ā USA Today reported.Ā
āIf a āconfidence crisisā can happen to First Republic, it can happen to any bank in this country,ā says Jake Dollarhide, Chief Executive Officer of Longbow Asset Management.
A run on these banks could pose a risk to even insured depositorsāthose with $250,000 or less in the bankāas the FDICās deposit insurance fund starts incurring losses, the economists wrote.
Morgan Stanley Mentioned in List of Banks at Risk

Banks that have the most risk right now are:
- First Republic Bank
- Huntington Bancshares
- KeyCorp
- Comerica
- Truist Financial
- Cullen/Frost Bankers
- Zions Bancorporation
The āTop 5ā also have a big risk factor, though many have deemed these banks as ātoo big to failā.
- Bank of America
- Citigroup
- JPMorgan Chase
- Morgan Stanley
- Wells Fargo
Is people’s money safe in banks today?
āItās not a problem unless your depositors decide itās a problem and ask you for their money back, which is sort of what happened with Silicon Valley Bank,ā said David Sacco, a finance professor at the University of New Haven.Ā
A case study of the recently failed Silicon Valley Bank (SVB) says that 10 percent of banks haveĀ larger unrecognized lossesĀ than those at SVB.
Nor was SVB the worst capitalized bank, with 10 percent of banks havingĀ lower capitalization than SVB.
“On the other hand, SVB had a disproportional share of uninsured funding: only 1 percent of banks had higher uninsured leverage.
Combined, losses and uninsured leverage provide incentives for an SVB uninsured depositor run.
We compute similar incentives for the sample of all U.S. banks.
Even if only half of uninsured depositors decide to withdraw, almost 190 banks with assets of $300 billion are at a potential risk of impairment, meaning that the mark-to-market value of their remaining assets after these withdrawals will be insufficient to repay all insured deposits,” said a report by SSRN.
Related: Wells Fargo Agrees to Pay $1 Billion in New Lawsuit
Yellen Tells Bank CEOs More Mergers May Be Necessary

During Thursdayās meeting with the CEOs of large banks, Treasury Secretary Janet Yellen told executives that more bank mergers may be necessary as the industry continues to navigate through a crisis, two people familiar with the matter told CNN.
The worst banking crisis since 2008, marked by a series of bank failures, plunging stock prices and concern about the business model of regional and mid-size banks, has forced a regulatory rethink.
Regulators, of course, prefer corporate mergers where strong banks take over weaker ones over destabilizing bank failures.
āConsolidation is inevitable,ā said Ed Mills, Washington policy analyst at Raymond James.
Earlier this month, regulators allowed JPMorgan Chase, the nationās largest bank, to buy most of First Republic, theĀ second-largest bankĀ to fail in US history.
āWhat happened here is because a bank was under-regulated and started to fail, the federal government has helped JPMorgan Chase get even bigger,āĀ Massachusetts Democratic Sen. Elizabeth WarrenĀ told CNN.
āIt may look good today while everythingās flying high, but ultimately if one of those giant banks, JPMorgan Chase, starts to stumble, the American taxpayers are the ones who will be on the line.ā
āThis might be an environment in which weāre going to see more mergers, and you know, thatās something I think the regulators will be open to, if it occurs,ā Yellen told Reuters.
Related: Bankers Want an Emergency Ban on Short Selling
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