Boomerang Executive In New Risk Role At Morgan Stanley

Kenneth deRegt, a former head of fixed income, has been re-hired by Morgan Stanley due to the transformation of the banks risk management team. This reshaping will see deRegt stepping into the place formerly held by Tom Duala, chief risk officer.

deRegt is coming back to the bank, after leaving it six years ago, and will now be a part of the new office of the chairman group, which deRegt’s main focus on risk management, internal controls and strategy.

The recent shake-up is due to the promise CEO John Mack made to tune-up the Wall Street risk management team after the bank announced a mark-down of a staggering $9.4bn due to subprime mortgage-related investments.

At this stage, after a review of the actions of Tom Daula, Morgan Stanley has deemed it appropriate for him to step down as soon as his successor has been appointed.

Criticism was leveled at Duala for not raising the alarm about the subprime trades, however there are those that say he did sound the alarm, and that it just wasn’t listed to.

According to a memo that was sent to all staff, deRegt will be closely working with Colm Kelleher, chief financial officer, who is the overseer of the risk management sector.

Mack has stated that deRegt’s experience in the fixed-income and capital-markets environments will enable him to be a highly productive senior manager, especially with the current market issues.

Sources have stated that deRegt is expected to be working hand in hand with Walid Chammah and James Gorman, Morgan Stanley’s co-presidents, in an effort to re-establish a stable base for the bank.

Even though deRegt is still on the board of Morgan Stanley Capital International, he has actually been managing director of the asset management company, Aetos Capital.

According to analyst, Guy Moszkowski, Mack stated that the bank would soon be making acceptable returns.

Moszkowski went on to state that the current notions surrounding investment banking were in the process changing back to a culture of debate, inter-unit questioning of trade strategy and sharp discipline.

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