The Financial Times reports that Morgan Stanley is completely reorganising of its securities sales and trading operations, which sees the scrapping of the traditional equities and fixed income divisions.
The restructuring also gives greater autonomy to the European and Asian regions, which are increasingly profitable for the Wall Street bank.
Morgan Stanley’s co-president and architect of the reorganisation, Zoe Cruz, says the moves reflect the blurring of traditional product distinctions, increasing risk complexity and the maturing of international markets.
The Financial Times says the reorganisation is a continuation of a process within Morgan Stanley and other leading investment banks to break down barriers between product groups as clients, particularly hedge funds, increasingly trade across asset classes.
Since John Mack returned to Morgan Stanley as chief executive in 2005, he has encouraged the bank’s traders to take on more risk, a strategy which has, so far, been highly successful.
The changes see Neal Shear, currently head of fixed income, become head of trading, and Jerker Johansson, now head of equities, becomes head of clients and services. They remain co-heads of institutional securities sales and trading, with Ivan Freeman serving as their chief operating officer.
The reorganisation also involves a strengthening of Morgan Stanley’s regional structure by giving responsibility for regional profit and loss to new regional heads of sales and trading. These will be Phil Newcomb and Rich Portogallo in the US, Colin Bryce in Europe, and Danny Hegglin and Jialin Liu in Asia.