The future of Morgan Stanley

We've discussed the future of Goldman Sachs quite a bit, so it's only fair we turn to Morgan Stanley. It's fair to say that both banks face a long road in terms of building up a commercial banking business. But what choice do they really have? The burden of formulating what the New York Times calls Morgan Stanley 2.0 falls to co-presidents Walid Chammah and James Gorman. The Times suggests one of them might end up succeeding John Mack as CEO. They have differing tasks at the moment. Chammah must find a way to keep the banking and trading units leading edge in a deleveraged era, while Gorman must figure out a way to build a commercial banking franchise. He may have the tougher task, especially in light of the fact that the prime-picking banks, notably WaMu and Wachovia, are gone. Shot of a mega-blockbuster-end-all deal, Morgan Stanley will have to attempt a piecemeal approach.

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