All right. Thank you, everybody. Before we get started, I have a few disclaimers I have to read. One is for important disclosures, please see Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. There's also another disclaimer I need to read: This discussion may include forward-looking statements which reflect Morgan Stanley management's current estimates and subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements. This discussion, which is copyrighted by Morgan Stanley and may not be duplicated or reproduced without their consent, is not an offer to buy any security. With that. Wouldn't life be so much more efficient if in every investor meeting, every room, all over the world, you didn't have to do that? If there was like, just code 6. You'd save it, right? There's got to be, I've got to talk to the SEC about this. Okay. It's ridiculous. Why do we do this? I mean, I know why you do it, but. Well. This is. I do it because. No, I know why you do it. I was asked to. I'm just saying, but why does the SEC require us to repeat something anyway? Maybe AI. I digress. Sorry. Can AI have a solution for that? Sure. Okay. Everyone knows James Gorman. James, Chairman and CEO of Morgan Stanley. You're in your 14th year as CEO, which nicely aligns with our conference, as this is our 14th year as well. I'm pleased to say that management approved the beginning of the conference when you joined as CEO, started as CEO. You're a great analyst. It was an easy call. Oh, you're so kind. Oh, it's true. 12th year as chairman, so that's exciting. Now, the most exciting news is that this will be your last conference with us as CEO, which is bittersweet, but want to just see if you could walk us through why you made the announcement you did recently, and also shed some light on what you think the board is looking for in a successor. Sure. Well, thanks and congrats again for the 14 years. It's been phenomenal. You know, I was thinking as I was coming over, the first conference I did, and this is sort of a little moment of history, was DLJ. Remember them before they became Credit Suisse, before it became UBS today? Mm. For Joan Solotar in 1999. There have been a lot of conferences. On the succession stuff, I mean, I've said right from the get-go that I think you should be intentional about succession, and you should run it like a process, just like we run budgeting or strategic planning or, you know, all our talent review processes. It shouldn't be kind of something that's done on a whim or is triggered by one's age or by good events or by, you know, go out when things are great, people keep saying, or, you know, on bad events, or... I've been saying for a long time, it matters. In my first board meeting in January in 2010, I told the directors who should replace me if something happened to me. I said, "You'll do what you want, but at least here's my opinion." Every couple of years, we reviewed the process. About five years ago, I said I'd leave in about five years. About three years ago, I said I'd leave in about three years. I just got back from a trip all through the Middle East and France and the U.K., and everybody kept saying to me, "So you're gonna stay another three years?" I think there's something in the general view that people don't mean it when they say it, but I definitely mean it. I said, "No." If the market thinks that, we need to sort of rip the Band-Aid off, and I thought an elegant way to do it was around the annual meeting to say, before the next annual meeting, I will have stepped down. The exact timing, you know, it's up to the board and a few other things that we've, you know, we're working our way through. I'm, you know, we've got, as you know, a bunch of things going on at the moment. Obviously, it's a more complicated environment. We're about to get the CCAR results. We're about to get Basel III first, like, look, which I'm sure we'll talk about. You know, we're dealing with some internal stuffs. We've had this investigation that's been in the media about the block stuff, and there's a whole range of things that I wouldn't mind either getting set or dealing with before I step down. Whoever replaces me has a complete clean sheet, and I think most of that will happen within a year, maybe well within a year, and we're off to the races. I just think it's important to separate the person from the process. There should be a process and not an individual's whim of what they want to do. It's what's right for Morgan Stanley for the next... You know, as a shareholder, I'm focused on the next 10 years, not on the next, you know, 10 months or something. That was it. The board has been great. We're completely aligned. We've got a great committee chaired by Dennis Nally, running the process, and the full board, Tom Glocer, and we have, fortunately, three great internal candidates. What we're looking for, you know, firstly, the obvious is do you go external or have to look externally? The board, certainly it's my view, strongly, is that we've deliberately built a team over a decade that is positioned to take over. Frankly, we have a team a decade behind them that's positioned to take. I sort of have a 20-year runway in my, you know, hopes and dreams. Whether it plays out exactly, we'll see. I know how hard it is to do these jobs and how much complexity there is. Having somebody who is culturally assimilated, is part of the leadership group, has sat in every, you know, key operating committee decision, every capital decision, every acquisition that we've done, is a real advantage. As somebody who effectively came from the outside, I was only at Morgan Stanley about 2 years, I think a bit over when I became CEO. Having that long history and working together, and each of the three candidates that we've named publicly, has that. As to what you look for, I think, you know, a lot of people focus on what business you're running and whether a business is doing well or not. Well, if that were the criteria, I wouldn't have got the job because I was running the smallest and worst-performing business. I think that's to be a great operator is necessary. Certainly, if you're running a business poorly, you would be disqualified. Fortunately, we've got three people running great businesses really well. That's necessary, but it's not sufficient. You know, you've got to deal with a very wide range of constituents, and, you know, deal with them on a global basis. You've got to deal with global regulators, you've got to deal with the obvious, the media, the public side of the job, and you've got to have a lot of resilience. I think physical resilience, mental resilience, and I think you've got to be prepared to make the call. You know, when we bought Smith Barney, people, most of Morgan Stanley was telling me we should be selling retail, not doubling up on it. When we, you know, bought Eaton Vance, everybody said, "You overpaid by $1 billion." I said, "I know," we bought it. The other option is don't overpay and don't own it. When we bought E*TRADE, you know, everybody said, a lot of people said, "Well, trading had just gone to 0. You know, payment for order flow is in flux." Culturally very different, I said, "They're all irrelevant. What we're planning is a 10-year transition of the business model, for that, you've got to make 10-year bets." Whether you overpay, I've said often or underpay by $1 billion is just not relevant. In fact, I would bet there's very few people in this room who could tell us what we paid for Smith Barney. The reality is, a leader of an organization has to be prepared to make the call and live with the consequences of being wrong a fair bit of the time. That is not to everybody's. You know, everybody wants to have top jobs at any institution, universities or not-for-profits, anything, but they don't necessarily want the responsibility and the accountability that goes with that, and that's what we're trying to sort through. It's a great process. I'm really proud of the way it's working, and I feel great about handing it over. 14 years is a long time to do anything. Sorry, it's a long answer, but it's an important one. No, no. I think you gave us a lot of color and a lot of insight into how you're thinking and what you're looking for. I'll go through a few more questions, but we will turn to questions from the audience in case you have any. Don't be shy. One of the areas, obviously, that we wanted to focus in on is the mix shift in the business model that you've been responsible for. Now, you're running the Wealth and Investment Management business. It's $30 billion in revenues. Mm. institutional securities, $24 billion in revenues. When you became CEO in 2010, wealth and investment management pre-tax profit mix was about 26%. Now, that's up at 52%. Yeah. You've materially shifted the firm's financial profile to something with higher growth, less risk. In the strategic update in January, you suggested that the firm could get to an even higher portion from wealth and investment management of pre-tax profit by 2025+. I'm not sure if the emphasis is on the plus or not. Sure. You know, in setting that goal, could you help us understand what you were thinking about with regard to the drivers of shifting that pre-tax margin? Well, I think it's really just math. I mean, the industry structure around the securities business, you know, broadly defined as trading all the way through underwriting advisory. It grows a little faster than GDP for sure. I mean, right now, as I'm sure we'll talk about, it's in a trough, right? That's not a permanent thing. That's just, it has moments like this. We happen to be having one now. We had one in, I think it's 2015, maybe a little bit in 2018. Mm. Every few years you have these troughs, but I see through all of that. I'm focused on the trajectory, and the business will keep growing. There's fewer competitors. You know, there's kind of 4, 5-ish global, truly global firms who operate in all the fixed income commodities, macro, micro, and across, you know, equity derivatives, cash, prime brokerage, banking, M&A, you know, everywhere from Japan to Saudi to Frankfurt to New York, and underwriting businesses. It's, it's the scale of doing that is really hard to create now. Maybe 20 years ago, it was possible, and 10 years ago, it was very difficult. I think it's impossible now. The good news about that business is it has just structural moats driven by the size and complexity and the regulatory complexity of running those kinds of businesses. The reality, though, is it will grow, given that it's sort of unassailable, but it will grow, you know, faster than GDP, but not. It just won't. You know, you'll have spurts, but then you'll have these troughs. The aggregate growth line will be strong. Not sort of transformative. Whereas in wealth and asset management, you still have huge market share opportunities that have just not been realized. I mean, just take wealth management for a start, we're 95% in the U.S., Last time I checked, there are a few foreigners who've got money. you know, figuring out the right way into that and the right vehicle, and now that we've got E*TRADE and the stock plan business we can take globally, I think there are, and I'm sure we'll talk about this, there are sort of endless opportunities in that space, and asset management is the last non-consolidated part of, you know, large financial services. You're starting to see it, you know, the Franklin Templeton deal, the TPG deal that just got announced. You're gonna see more of this, right? You're gonna see more alts players merging. You're gonna see more people with multi-vertical, from fund to funds, to alts, to money market funds, to, you know, all the, all the alpha stuff from... You know, we've done it. We've got it with our tax effective, with Parametric, we've got it with Calvert with sustainability. We've got, you know, we've got that, but we could easily get bigger than that. Just mathematically, as you step back, tremendous moats around the institutional businesses, and they will grow faster than GDP, and they'll come out of this trough, and not concerned about that at all, but sort of disproportionate growth on the other side. Just arithmetically, you end up with wealth and asset management will get bigger. It will, for sure, be a bigger part of this firm. Then you start getting into both acquisition strategy and capital strategy, and we'll talk about Basel and what that might do, and, you know, all that sort of stuff. I think that's where I came out, but it's just, it's sort of inevitable. Maybe we could drill down. Without diminishing, sorry, the institutional-. Yeah. Business. Some people have taken it to read through, "Oh, you must be shrinking institutional." That's not true at all. I always said the mistake, the sort of, the perception, mistaken perception about our strategy was that we've become a wealth and asset management business. It's totally false. What we did was attach a viable wealth and asset management business to a world-class institutional business, and we've still got a world-class institutional business. Okay, that clears that up very nicely. Sure. Maybe we could dig into one of the other goals that you announced, I believe, this past January, on the net new asset growth goal. You outlined that you thought the firm could generate $1 trillion every 3 years. Wanted to understand how you're thinking about the drivers of that. Is that all organic? Does it include inorganic? Yep. Maybe speak to the wealth channels that are behind it. It's funny, I was with my team in the office this morning, and the first presentation I did to our board, which I happen to have, was a pretty brutal analysis of our then retail business, which was the old Dean Witter business. Mm. With a little bit of Morgan Stanley private wealth. In it, I sort of assessed where we were on various measures. I mean, I'll give you one fun fact, at least I thought it was fun. We paid out that year in southern Florida, 17% of revenues in legal expenses. Right? If you start with your margin, you know, you start at, I don't know, legal should be, like, 1%, so you start at 99. We were starting at 83 and work your. T he margin for the business at, for the full year was 8%, for the last quarter, it was 3%. The other fun fact was our net new money for 2005, for the full year, was -$5 billion, $3 billion. Negative $3 billion for the whole year. I had an aspiration chart, by the way. The aspiration on pre-tax margin was to get to 20%. Mm. which everybody thought was completely nuts. The net new money aspiration was $30 billion, 3, 0, and now it's $300 and whatever, $330. I think it's... I'm highly confident about this. I think this will definitely happen. In fact, it's happened for the last 3 years. It's not gonna be dependent upon deals, although we've done two institutional RIA deals in the last couple of years, and they were probably in some of last year's number, I forget, whether it's last year or the year before. You know, we brought in $110 billion in the first quarter. Second quarter, you get some tax effect. In April, there's some negative closes. People pay their taxes, it's typically not as good, it won't be bad. The full year, yeah, I think we'll be right on track. It just, you know, and Andy Saperstein and Jed Finn and Ben Huneke and others, Ben Slavin, have described as funnel impact. It's like filling up the bathtub, and before we had kind of one hose and one plug. The hose was how many people you could hire, and the plug was how many people bailed and went to another firm for a better bid. That was the game. It was basically recruiting. Recruiting is irrelevant now. We lost two people last week. We get the numbers on Friday night about 6:00 P.M. We lost two people, one of them to a firm I've never heard of, and we gained 2 people. This is across 15,000. If you're averaging about 4 a week in and out. If you're doing 4 a week on 50 weeks, that's 200 people on 15,000. Recruiting's finished, and the reason for that is 'cause we own E.F. Hutton, Kidder, Legg Mason, Robinson- Humphrey, Dean Witter, Reynolds & Co, Smith Barney, Shearson, Lehman. That's one firm. That's us. The recruiting game is over. It's onesies and twosies, but it's all these other bits and pieces, and you just look at dividends and interest on $4 trillion. I mean, that's money. Unless people take it out, that just keeps compounding. We've got this enormous embedded compound. You've got the great rush that's coming from, which I think is sort of the next, like, the next frontier, which is the whole retirement and workplace space. You know, the conversion, first quarter, we had great conversion of leads from the workplace into financial advisors. I think it was about $25 billion. Again, it won't be as high, I suspect, in this kind of tax environment, but once you get past that alone is a pipe we didn't, we didn't even have, right? We didn't have E*TRADE clients converting. Mm. workplace clients converting. Nonexistent. That alone created, in 1/4, nearly what my aspiration was back in 2006 for the whole business. It's kind of crazy. I mean, it's definitely gonna happen, and I feel more confident about this than I felt about the 20% margin or any of the other metrics because math just drives it. It's people rich. The dirty, you know, little secret is rich people get rich faster than other people, and compounds and interest, bang, fall straight in the bathtub. When. I wish I was staying to see it. It's gonna be $20 trillion, by the way, but I can't say that because I'll get in trouble with them. No, it's interesting because you did put this out in January and then have your announcement just in April. You know, some folks have said, "Hey, was that a mic drop to your successor?" the way you've just described it. It's just beginning. It's just beginning, it's a thing of beauty. It really is. Now when I'm thinking about the three channels, the advisor-led. Yes Workplace, self-directed, is any one of those channels a bigger contributor? Well, right now, the biggest is definitely advisor-led. Not because the recruits in and out, just the sheer volume of money coming off the back of their accounts. In the future, I think it's gonna migrate. The direct will not be the biggest, I suspect, ever, because just sheer size, it can't get there. The really interesting one is the whole workplace side. You know, if you go out 10 years, that or maybe shorter, and I might be contradicting what Andy said, but my view is definitely advisor, 1, you know, direct to workplace, three now. In 10 years, it could be two, three, one. Got it. Okay. Maybe we could turn a little bit to technology, just as it relates to the wealth channel, because you've seen, you know, your team delivering best-in-class technology across the wealth channels. As you think through the next couple of years, is there more that tech can do to deliver some of this NNA, or is that just icing on the cake? Well, you know, I mean, one of our competitors once said that they weren't a financial institution, they're a technology company. I think that's... Well, politely, I disagree. We're a regulated bank, we use technology in everything we do. I think that team has got really smart about it. You know, think about E*TRADE is basically a brand and technology platform. That's what E*TRADE is. We bought a lot of technology. We bought a digital platform, which we were building and spending $200 million a year. By the way, we haven't fully integrated E*TRADE. That's another thing I wanted to get done. I promised the board when we did Eaton Vance and E*TRADE, I would stay through, you know, about 3 years to make sure they landed safely. We just did, I think 2 weekends ago, a conversion about 30+% of the E*TRADE onto the one platform off Broadridge. That went really well. We did a trial earlier in the year. We did that one. Now we know it works, now we'll just get. T hat'll happen in the next few months. I mean, I think some of the stuff they've done with Next Best Action, the sort of virtual financial advisors now rolling out AI, the partner we have with OpenAI, which is basically, it's an internal system to take all of Morgan Stanley's information, your research, and present it to financial advisors at, you know, at the click of a finger. You know, the question is: do these things lead you to need fewer people, or do your existing people become more productive? I'm firmly in the second camp. Mm. There will be some elements of what we do, we just don't need, you know, somebody to create a program. It can all be done for you. My excitement is they can do a better job serving, understanding what clients really have financially, what their needs are in servicing them. It's gonna bring in much more banking product because they'll have more capacity for it. Intergenerational wealth transfer, have more capacity to deal with the family. I think it's very positive. Do I. I would say this about the team there. They've got a much stronger technology bent than I had when I was running the business. Mm. I think, you know, it really has leapfrogged way past where my capabilities were. That's exciting. It's like a whole new frontier opens up. It sounds a bit more revenue-generative than expense now. Oh, yeah. Yeah. This is all, it's not all, but a lot of it is front-office stuff. Before we turn to investment management, one last on wealth. You know, there's questions out there about what if we're in a higher-for-longer rate environment? And then-. Mm You get into the questions and the concerns around deposits. Mm. Wealth deposits. Yep. How do they migrate, and, you know, is there a revenue reduction in the wealth channel that is there for you to offset? How would you offset that? Well, I personally don't think we're in a higher for longer. I think the Fed is getting very, very close to the end. My gut is they're not there, but they're within, you know, one or two hikes. I don't think we're gonna see a cut this year. I think they'll sit on that for a while. I would sit on it. I'd make sure you got it right. I assume all things being equal, you would expect cuts to occur at some point during next year and bring it down a little bit from wherever we finish in the high 5s-ish%, you know, to more like 2%, 3% probably over time. There's gonna be a lot of movement on that. On our narrow deposit, we've certainly seen, you know, be careful what I say. It's, it's been different this quarter from the previous several quarters. You know, April, some deposits leave to pay for taxes. Not as many as maybe we'd thought. May, things look pretty moderate, frankly, more normal, if I will, and June, it's a bit too early. I don't think there'll be a lot of drama on the deposit front, and I don't think another 25 or 50 basis points, frankly, creates a lot of drama. I think, you know, and then we've got a lot of money sitting in cash or cash equivalents now, and you'll create revenue when those start getting invested. We've got nearly 25% of the total assets in cash equivalents right now, which is extraordinary. I'm not bothered by this. I think, you know, the margins on that business, they'll clearly be hurt this quarter because we'll have severance. We've got the final integration pieces are coming through, and there's been no new issue stuff, no calendar stuff. It's, you know, it's, that just mathematically makes it a tough quarter, but I think it will finish the year strong, and, you know, next year, I think it's gonna be really good for that business. Okay. Let's turn to investment management. Sure. You already spoke a little bit about Eaton Vance acquiring a few years ago, which has brought a tremendous platform, best-in-class customization, tax solutions for institutional and wealth clients. Are there any other strategies or geographies that you think we should be leaning into? Well, we, you know, we're still probably more U.S. I mean, the being U.S.-centric in wealth, firstly, is if you have to be in one place, you want to be in the U.S. To be a monster in the U.S. is like a category killer. You know, going to Vietnam and Indonesia and Malaysia and the Philippines and Thailand and Taiwan and, you know, Japan and across all of Europe, all with different jurisdictions, all with lots of investor protector rules and local licenses and things, it's hard. In wealth, we're more likely to go international through workplace, through direct or maybe in Japan with our partnership with MUFG. Some things we could do, highly unlikely to do private banking. We don't, I don't. We owned a private bank across Europe for 21 years. We've made money in it once out of 21 years. It's all you need to know. It was subscale. A lot of business there gets done inside private banks. I think as a Fed-regulated institution, you wouldn't want to do, and the clients wouldn't want to be with you. Mm-hmm. Sort of mutual dislike. With asset management, it's completely different. The first is how do you broaden the number of verticals so they're at scale? You have on the alt side, we've got a really good real estate business, rebuilt since the crisis. The infrastructure business doing great. The mezz business, PE is small, but performing well. You've got all the fund of funds business. You move into the deep value stuff that's been done out of London, the growth side obviously covered through Dennis Lynch. Atlanta Capital, we picked up with Eaton Vance. You have Parametric, which has had huge positive flows and is a complete natural fit with our wealth strategy. Calvert, which I think is just at the beginning of what we can do with that platform. You know, all the fixed income, which we consolidated. We've got the pieces now. Any of those pieces can go international. I I mean, one of the reasons we bought Mesa West, which is a credit shop, was basically give them global distribution. That's worked great. I would see us doing more deals in asset management and being, quite geographically agnostic. Okay Would be the way I'd say that. Let's turn to institutional securities. M&A and underwriting's been, you know, under pressure for the past year now. What's your view on how long this lasts, and what do you think the catalyst for a higher level of activity is in those two threads? Boards need to know if you're financing a transaction, sort of what are the conditions of it by the time you get to close, and for that, you need some sense of where rates are gonna go. If you have the highest rate increase in 40 years, you're a pretty brave board that's ponying up to a major transaction in that environment. You want to kind of see where this thing ends. As soon as I think the Fed indicates they're done, you're starting to see activity pick up. We're, you know, we're clearly seeing more green shoots. I'm having more discussions with CEOs. I talk to them about deals that they wanna do, but they're not quite ready yet. I think it's, I had thought it's back half of this year. You know, it, there'll be more evidence in the back half of this year than the front half. For sure, it will improve, but I think you'll see more run rate type stuff through next year on the M&A and new issue calendar. I mean, we're starting to see some stuff. I talked to Mo Assomull, who runs our capital markets, a couple of days ago. He's feeling a little more confident, more conversations. It's, you know, it's been pretty horrible. I mean, let's be honest. It doesn't mean the corporations... I mean, if I was staying another 10 years, I'd definitely be doing more deals. Mm. Might do them right now, but-. Mm Wouldn't be three years sitting around on my hands waiting. I think there's a time when boards and CEOs just say, Okay. We know enough to know we can move forward. Let's move forward. Higher degree of confidence. Yeah. Is basically what you're looking for. It's coming. Okay. On institutional securities, maybe this is a good opportunity to see what you're seeing with regard to any trends in the quarter that you want to share across banking and trading. I think, maybe it was Andy. In one of the conferences, somebody said, I think it was Andy, Notable decline. Mm. A good word. I haven't seen that used before. Which, you know, meaningful, notable, and I think some of our competitors said 25% year-over-year. You've always got to look at where somebody started a year ago, what actual their numbers were in that quarter. I'm never too excited about relative percent change. It's just down, and it's meaningfully down. My gut tells me, and this is probably not a good read, but it served me really well, pretty well over time. I would say, I feel like we've bottomed on this, and I just feel the tone is a little better. I think getting through the debt ceiling, what a joke that we had to go through that again. I mean, we all know where it's going to end. Like, can't you just do it and save us three months of ridiculous daily news media distraction? That, I think that where the Fed is at, you know, the political politics here is just gonna be rough. And I think everybody just has to accept that. There's gonna be more action in the market. I'm starting to see that, but right now, yeah, Q2, I don't, I don't know, down notably. I thought that was a good answer. You mentioned earlier that, you know, in the Q, to Q, there will be some severance to reflect the fact that there was a reduction in force. Do you feel that, you know, now you're at a point where you're good on that front? I'm just wondering hoM you position the business-. Yes. More profitability today and share gains tomorrow. Yeah, it's interesting. I mean, we during COVID, we guaranteed everybody their job. I think that was definitely the right thing to do. It's just at a human level, everybody's dealing with so much stress, mental health, kids at home. I mean, you don't want them worrying about if they got a job. It's Morgan Stanley. I mean, we can afford it. We did it. We kind of expected there'd be a real uptick in attrition. For like three months, right at the end of that period, we saw an uptick, I think, the first quarter of last year. It's like straight line, like down. We're at really low levels of attrition. I mean, it's nice, it's flattering. We want to grow, right? We just brought in, I just spoke to 778 interns on the Intrepid a couple of days ago. Hell, we want this new blood coming in. I challenged the team last December to take a look, and I think they brought their headcount down by 3%. We promote a lot of people, we get through January, I said: We're gonna take another look at the end of April, and we did. I said: If this hasn't turned, we're gonna have another go at it than we did, and I think we took out about 3,500. I think, it's, you know, you can never say for sure, but it's unlikely we'll be going back to that well. I think we've got it where we want it, you know, we took out a lot of managing directors, creating capacity for others. You know, I feel it's not pleasant. You know, I hate doing this. I've done it many times in my career, but it was the right thing to do. You're trying to ensure you're balancing shareholders' interests with, you know, loyalty to employees and keeping the culture in place, and sometimes you got to make the hard call. It's back to where I started on the succession stuff. Sometimes you got to be the person who takes a few arrows because it's the right thing to do, and that's what we did. All right. That was very clear. Just wondering if anybody in the room has a question, follow-up anywhere? I'm happy to keep going, but... Oh, here we have. Yeah, thanks. You talked in your institutional business about, you know, it being a consolidated business and it being sort of big moats. Usually, when you have those two characteristics, you see the competitors kind of extracting large surplus returns. Arguably, you're not doing, not you, but the industry is not doing that in the institutional business. Is that just a timing thing, or is it regulation, or why not? I think it takes some time for what I call the wannabes to finally give up. The wannabes buy the most marginal business and, you know, do the most self-damage with fees. I think that's starting to flush out. I think the Credit Suisse UBS transaction is a pretty pivotal turning point, and I think it's a good warning sign. Any board of any other company that thinks they're gonna get large in sales and trading globally, I mean, it's not so easy, right? It's a very complicated business. I think the bank, you know, the bank balance sheet, the other side of where we're gonna go with capital, which is gonna be more capital, right, under Basel, will be, you know, it. We'll demand higher returns on putting that capital to work. there'll be a trade-off in who's getting that capital, higher margin business, so it'll happen, but it's not gonna dramatically change the economics of the business. It will help offset the capital basis, is where I come out at it. Anybody else in the audience? All right. Just on that point on capital, with Basel III Endgame coming, do you feel that this is something that you just absorb naturally, or are there businesses that you're gonna have to flex to get through this? We're in a really interesting period. This is one of the reasons why I want to stay for a bit, to sort of get through, work through this. Firstly, we've got CCAR, which is gonna be tougher. Remember, when CCAR came in around 2012, it was basically in lieu of Basel III because of whatever Basel was back then, because the U.S. was not ready to adopt. They created, effectively, our own version of Basel internally. There are a number of things going on right now. Number one, if you take the Basel III stuff on its face, and particularly the way that they treat operating risk assets, RWAs are going up significantly, and then obviously on the trading book, and there's discussion around how they're treating, mortgages. There's kind of a real movement afoot in Basel. I think the, based on just conversations I've had and the way these things typically play out, the first, you know, set of numbers that come out of sort of theoretical, and we'd now like you to comment, will be ugly, right, for the industry. Then they'll say, "Well, that wasn't such a good idea." The comment period is gonna be very vigorous. Mm. It's kinda hard to argue the big banks are undercapitalized when they're actually got together to support First Republic, right? It's like, if we were weak, why did you wanna take $25 billion or $30 billion of deposits? What's the deal? You look at our CET1 ratios, you look at how the banks I'm not just talking Morgan Stanley, but generally, I think they're in, they're in really good shape. I, you know, the sort of the intellectual logic of, "Oh, my God, we missed something. We've got to redo capital," is just, it's just not there. There's just no actual basis, except some academic reports that exist that say banks should have capital of, you know, 98% or some idea. I'm kind of in this very curious period where I think we're gonna get an ugly sticker number for the industry. I think they're going to, if they're smart, emphasize there is an extensive comment period. There will be a lot of battles that are already forming across the regulators and within the government on how aggressive they should be with the banking industry on this. Then you're gonna have a long transition period, much longer than people think. I think the early transition that was put out there was, you know, projected, most people thought January 1st, 2025. I'd be very surprised, right? Then you're gonna have to redo CCAR with the stress capital buffers and all the other things to say, "Well, hang on, we're already accounting for this over here. We don't need this here. As investors, I would just say to you, and it's what I've said to our board, be prepared for a lot of news, but don't be overwhelmed by it. This journey has a long way to go. I've talked to a lot of people about this, and there is not uniformity-. Mm O f view around it. Just logically, again, I get back to, I mean, we were thanked by the U.S. government and the Fed for our actions around First Republic. I called and thanked. Well, surely we don't have capital in... You know, you wouldn't have wanted us to do that if we had a capital problem. I think this is a journey that... You know, unfortunately, the smaller bank thing, what happened with Silicon Valley Bank and First Republic and Signature, which, by the way, had, in my view, almost nothing, if not nothing to do with the regulatory change and oversight of those banks. This was Management 101, but that's my view. It had nothing to do with that. I think, you know, but dropping the $250 billion down to wherever they go, $100 probably makes sense. Why not? Yeah, that's where I am on that. I think it's, you know, it's definitely not going to wind up where it starts. That I feel very strongly about. Well, it'll be exciting for us to be involved in. Yeah, You know, how do investors see through this period and comment periods. Mm. Sort of worst-case scenarios, understand what worst-case scenarios is, but manage your investments? I mean, I think there are gonna be some, potentially some investment opportunities. I mean, if the banks trade off a lot on this, I'd be a buyer. All right. I will put you on speed dial. Yeah. Well, I'll be unemployed, so I'll need to do something. Well, no, no. I hear that you will be migrating over the next 12 months to Executive Chair. Yeah, you know, I talked to the board about that, you know, they'd be happy if I committed to a few years of doing it. I'm not gonna do that. I think that's wrong. I think an executive chair role is simply to get out of the road organizationally. You wouldn't sit on management committees, operating committees. James Gorman is the executive chair for a couple of years, you know, you don't need somebody else babysitting you. What you need is somebody to go to privately. These are very lonely and difficult jobs. Somebody you can trust and say: Here's what I'm thinking. How would you respond? I just had this call from these regulators. How would you handle that? I just wanna be there to help whoever has this job succeed, and that means getting out of the road for running the business. That's I mean, it's not easy, but that's their job. Help them on stuff that they've just never seen before. That's why I put in the thing. It's for a period of time, which gives us total flexibility. The minute I think that it's safe to leave the room, I'm out of there. 'Cause it's not fair, it's not right for an organization. Organizations grow, under the next CEO, there will be a whole talent pool that will now take a step up, and under them, another one. That's what creates, you know, 10, 20, 30 years of great leadership. You migrate into this executive chair role, and you think about Morgan Stanley over the next three, five, 10 years, what are the opportunities that you're most looking forward to seeing the firm achieve? Well, there's gonna be, you know, sort of challenges and opportunities. I think there's gonna be some interesting dynamics in the banking sector over the next five years. It's gonna call into question what sort of institution you want to be. I think just strategically, that's will be a question thrown up by some of the changes in regulation. I think, and secondly, I think, you know, we've been long the U.S., which has served us really well in the last decade. A little more global balance, I think would be positive. They're the two sort of strategic stuff. In terms of, you know, the institutional business, I think is phenomenal. We can, you know, we can certainly pick up share in banking and equities. It's hard to do it around 20%. In fixed income, we're around 15%. I'm sorry, 10%, we're kind of okay with that. I think it's, you know, with the modes I described, I think that business is in very good shape. It's well-run. You know, we've had our stumbles. We've had, you know, Archegos, just to say. We navigated through that, given the hand we were dealt and given that we were underwriting, I think it was Viacom at the time. We, you know, we had to kind of hold our positions and not blow them out. Cost us some money, we learned from that. That's one thing in, you know, a long run. I think that business is good. I think asset management, there'll be more deals done. I think that business is getting to scale. It's well-run. There's a really solid management team in there now. We've picked some great people out of, you know, Eaton Vance, including Parametric, Calvert, and Atlanta Capital, and also out of, you know, the old Morgan Stanley asset management business. I think what Dan Simkowitz done there is great. With the, you know, the wealth, it's just, as I said, it's a thing of beauty. I mean, it will be very hard to stop that machine. You know, I speak with some experience on this. Once you're compounding at that size, it's just very hard. I don't know that there are domestic deals to be done. I think probably not. Internationally you could, I think you've got to trade off going, doing it on your own. Doing them in small markets makes no sense. If you're gonna go internationally, you gotta do it where there's real money. Great! Well, James, thank you so much for your years of leadership and for your years of supporting our conference and our fourteenth conference, and your fourteenth year as CEO. Appreciate your time, wisdom, and insight. Thank you. Thank you. Thanks, everybody.