The James Gorman era has begun at Morgan Stanley (MS). And he marked the moment with an interview with the New York Times. He has a fine line to walk. He has boldly declare his intention to correct the mistakes of the past. But he can't make too much of those mistakes because they happened on the watch of John Mack, the chairman of the board, who's not going anywhere soon. Gorman pretty much said all the right things--no "God's work" gaffes. The firms will not make reckless proprietary bets and will focus on being a client-centered investment bank.

But you have to wonder how the new conservatism will position it against its rivals, including Goldman Sachs (GS). Analyst Guy Moszkowski tells the Times that Morgan Stanley has about $17 billion in capital committed to its institutional securities business, compared with $40 billion at Goldman and $33 billion at JPMorgan (JPM). Still, you have to applaud the willingness to ratchet down, though that may mean ratcheting down its agency business too. The humbleness is right for the moment. But no one wants to see the bank become second tier.

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