After a tough few weeks, Morgan Stanley CEO James Gorman says he’s fully recovered from the coronavirus.
“I was one of the lucky ones — I was not hospitalized, and my lungs were not affected …,” he said during a televised interview with Bloomberg on Thursday. “My heart goes out to those who are not that fortunate. It’s a curse.”
More broadly, “The shock to the global economic system is something we have not seen since the Great Depression, and … [meanwhile] we have this massive healthcare crisis making its way around the world,” Gorman said. “You cannot model this.”
For businesses to survive, “What you’ve got to do is preserve your capital, ensure you’re well positioned to deal with the risk, understand the risk you are taking on as a business and manage your way through that,” he explained.
As part of its remote work arrangements, the bank’s executives speak daily and “are organized around … doing the job for clients and ensuring that Morgan Stanley remains stable during a period of dramatic dislocation,” Gorman said.
Today Is Different
When asked if the COVID-19 crisis is worse than the financial crisis of 2008 in terms of its economic fallout, “I’m not sure I would agree with that,” he said.
While the current drop in GDP “is obviously so much worse … ,” Gorman said, “there are just so many unknowns now” vs. the fundamental risks to the financial system of 2007-2008. “Without that rescue [of the financial system about decade ago], who knows what damage, over multiple decades, there would have been for the global economy.”
What’s required to reverse today’s economic downturn? “The health care crisis has to get resolved,” he said. “We’re seeing that in certain places …., but we need to see that particularly in the U.S.”
Next, the unemployed “have to get back to work,” the CEO explained, “then confidence is going to creep back, but it will be slow. This is not going to be rapid turnaround.”