James Gorman (OX 1976) featured in the Weekend Australian
Wednesday, 17 July 2024
From the suburbs of Melbourne, James Gorman became one of the most powerful players on Wall Street. He wasn’t a ruthless dealmaker, but he had equal impact. His exemplary risk-management skills saved one of America’s biggest banks and rebuilt it after the global financial crisis.

Gorman recently stepped down as chief executive of Morgan Stanley after 14 years. He may not be widely known in Australia, but is revered in banking circles for driving the transformation of an American institution.

When he became CEO, Morgan Stanley was reeling with losses after the 2008 financial crisis and had become emblematic of a decade of excess. Gorman knew he had to do things differently. He installed a “sandbox” approach permitting risk taking – within limits. Through several well-timed asset management and wealth acquisitions, he moved away from trading and investment banking toward a balanced financial services house.

In the process, Morgan Stanley outgrew Wall Street rivals including Goldman Sachs and Citi, as well as European players UBS and Deutsche Bank, to become the fourth-largest bank in the US. Gorman’s influence was such that his approach to risk is now widely used inside trading banks around the world.

Growing up in Brighton in the 1960s and attending Melbourne University, Gorman still identifies as a “Melbourne boy”, and recalls Saturday afternoons watching Aussie rules at Collingwood’s home ground, Victoria Park.

In a speech last year, Gorman said his only real connection with money when growing up was the time he attempted to borrow $40,000 to study at Columbia University in the US. His local bank saw him for what he was: an unsecured creditor with zero assets. However, Australia’s banking system was undergoing deregulation. “One of the new banks around the time – obviously desperate for business – deemed that I was worthy of credit, but at a challenging interest rate of 24 per cent,” he said. “I jumped at it. I was going to New York.”

On his decision to step down, Gorman last year told London’s Financial Times: “I’ve loved it. I’ve loved all of it. I’ve done it for 14 years, that’s enough.” More recently, he joined the board of Disney. And he still keeps a close watch on Collingwood.

– ERIC JOHNSTON, PICTURE BY MICHAEL BUCHER/WALL STREET JOURNAL