In the move, precipitated by $3.7 billion sub-prime write-downs at Morgan Stanley, new co-president Walid Chammah takes over responsibility for the Institutional Securities business of the firm.

James Gorman has been promoted to the position of co-president of Morgan Stanley after the retirement of Zoe Cruz. He will oversee the Wealth Management and Asset Management division of the Wall Street bank.

In the move, precipitated by $3.7 billion sub-prime write-downs at Morgan Stanley, new co-president Walid Chammah takes over responsibility for the Institutional Securities business of the firm.

The pair will report to chairman and chief executive officer John Mack.

Ms Cruz oversaw trading at Morgan Stanley and was tipped as a possible candidate to succeed Mr Mack.

Mr Gorman joined Morgan Stanley in February 2006 as the president and chief operating Officer of the Global Wealth Management Group. In October 2007, he took on the additional role of co-head of Strategic Planning with chief financial officer Colm Kelleher.

Prior to joining Morgan Stanley Mr Gorman held a succession of executive positions at Merrill Lynch, including leading from 2001 to 2005 the company’s US and, subsequently, global private client businesses.

Before joining Merrill Lynch, he was a senior partner of McKinsey & Company.