Morgan Stanley's future in prime brokerage

What are Morgan Stanley's intentions in the prime brokerage model? Well, fairly or not, the perception has developed as of late that it was seeking a new business model that relied less on leverage and anything seen as risky. Many assumed it wanted to ratchet back in prime brokerage, after having long ruled the roost with Goldman Sachs, but that may not be true.

Reuters reports that it "will allow hedge fund clients to place some of their holdings in a trust bank, offering a new layer of asset protection to lure prime brokerage clients who jumped ship amid market turmoil last year." So it would appear it wants to rebuild. The idea is to reassure clients who fled, fearing for the solvency of the bank. Morgan said in April that the balances of its top 50 prime brokerage accounts rose 10 percent in the first quarter--so it's on its way. 

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- here's the article

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