Financial World: International Banking.

International Banking.

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GRAHAM BOWLEY AND LOUISE STORY, NEW YORKSeptember 12, 2009
MELBOURNE-RAISED James Gorman has ascended to one of the most prestigious roles in international banking.
Educated at Xavier College and Melbourne University's law school, 51-year-old Mr Morgan will replace legendary Wall Street blue-blood John Mack at the helm of Morgan Stanley.
Mr Mack - his bank and reputation smarting from the financial crisis - is bequeathing Morgan Stanley to a relative newcomer: Mr Gorman, the quiet power behind a new push to lure ordinary investors to the bank's blossoming brokerage business.
The appointment, announced on Thursday, ends months of speculation over who will succeed Mr Mack as head of what was, until recently, one of the most prestigious and successful banks on Wall Street. Unanswered are the many questions still swirling over Mr Mack's legacy - and, now, over Mr Gorman, his handpicked successor.
Mr Gorman will become chief executive on January 1; Mr Mack, 64, will remain chairman.
Mr Mack presided over an era of unprecedented profits - and then record losses. Only a year ago, Morgan Stanley nearly foundered like Lehman Brothers. It was saved, like so much of Wall Street, by a multibillion-dollar bail-out and other government aid.
Mr Gorman will come to the job with a far different pedigree than Mr Mack. A lanky, cerebral Australian who dislikes being called Jim, Mr Gorman is co-president in charge of Morgan Stanley's global wealth management. He joined Morgan Stanley less than four years ago, from Merrill Lynch, where he ran the global private client business. Before that, he was a senior partner at McKinsey & Co.
For much of the past year, Mr Gorman and another executive, Walid Chammah, who runs the investment banking and capital markets operations, had been vying for the top job. Mr Mack seemed to have favoured Mr Gorman, whom he had hired and promoted through the ranks.
For Mr Gorman, the good news came on Monday evening, over dinner and drinks with Mr Mack in Manhattan. After a 10am conference call on Thursday with board members, the deal was done.
R. Glenn Hubbard, dean of Columbia Business School, who has known Mr Gorman since his days at Merrill Lynch, said he was a ''strategic thinker'' and his qualities made him ''a good recipe for success''.