Page last updated at 09:15 GMT, Friday, 11 September 2009 10:15 UK

Changes at top of Morgan Stanley

john mack
Mr Mack presided over a huge push into riskier areas like derivatives

US bank Morgan Stanley has said its chief executive, John Mack, will be replaced by a relative outsider.

Mr Mack, who has spent most of his career with the bank, will remain chairman when he steps down at the end of the year.

James Gorman, who heads the private banking side, will take over. Mr Gorman joined the bank almost four years ago.

Morgan Stanley saw record losses last year and survived the financial crisis because of government aid.

The transition at the top of Morgan Stanley is considered a move away from the risky lending that brought the bank huge profits, and later losses, and back towards more conventional banking.

Mr Gorman, born in Australia, joined from rival bank Merrill Lynch.

Morgan Stanley made a $159m loss between April and June, the third consecutive quarterly loss for the Wall Street bank.

It was also hit by the cost of repaying the government funds it took at the height of the financial crisis. Including that charge, losses totalled $1.3bn.

Meanwhile, many of its rivals have returned to profit.

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