
Morgan Stanley (NYSE:MS) CEO James Gorman said on Friday he plans to step down as CEO this year.
The bankâs board has narrowed its CEO search to three âvery strongâ internal candidates, Gorman said.
Morgan Stanleyâs CEO candidates are the men leading the bankâs 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 âfor a period of timeâ after stepping down as CEO, he said.
âThe specific timing of the CEO transition has not been determined, but it is the boardâs and my expectation that it will occur at some point in the next 12 months,â Gorman said.
âThat is the current expectation in the absence of a major change in the external environment,â 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 that 183 more banks are at risk of failure even if only half their uninsured depositorsâthose with deposits greater than $250,000âdecide to withdraw their funds, USA Today reported.Â
âIf a âconfidence crisisâ can happen to First Republic, it can happen to any bank in this country,â says Jake Dollarhide, Chief Executive Officer of Longbow Asset Management.
A run on these banks could pose a risk to even insured depositorsâthose with $250,000 or less in the bankâas the FDICâs 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 âTop 5â also have a big risk factor, though many have deemed these banks as âtoo big to failâ.
- Bank of America
- Citigroup
- JPMorgan Chase
- Morgan Stanley
- Wells Fargo
Is people’s money safe in banks today?
âItâs not a problem unless your depositors decide itâs a problem and ask you for their money back, which is sort of what happened with Silicon Valley Bank,â said David Sacco, a finance professor at the University of New Haven.Â
A case study of the recently failed Silicon Valley Bank (SVB) says that 10 percent of banks have larger unrecognized losses than those at SVB.
Nor was SVB the worst capitalized bank, with 10 percent of banks having 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 Thursdayâs 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.
âConsolidation is inevitable,â said Ed Mills, Washington policy analyst at Raymond James.
Earlier this month, regulators allowed JPMorgan Chase, the nationâs largest bank, to buy most of First Republic, the second-largest bank to fail in US history.
âWhat happened here is because a bank was under-regulated and started to fail, the federal government has helped JPMorgan Chase get even bigger,â Massachusetts Democratic Sen. Elizabeth Warren told CNN.
âIt may look good today while everythingâs 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.â
âThis might be an environment in which weâre going to see more mergers, and you know, thatâs something I think the regulators will be open to, if it occurs,â Yellen told Reuters.
Related: Bankers Want an Emergency Ban on Short Selling
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