The firm’s annual shareholder meeting was today … buried deep in the story from the Wall Street Journal were the following paragraphs regarding comments made by Morgan Stanley CEO James Gorman.

In the meeting, a brisk one hour compared with Goldman Sachs‘ three-hour marathon, Mr. Gorman also said Morgan Stanley was committed to regulatory reform. He said that institutions taking excessive risks should be allowed to fail but that the U.S. shouldn’t limit the size of successful financial institutions.

Mr. Gorman said the main concern for investors right now is the "lack of certainty in the markets."

On one hot-button issue, Mr. Gorman added that "most" derivatives should be cleared centrally, but that the step to improve transparency wasn’t needed for the most customized product.

via Morgan Stanley’s Gorman: Not Aware of CDO Probes – WSJ.com.

Now then, personally, I think that even if deeply customized derivative contracts aren’t cleared centrally, they should STILL be subject to the same sorts of regulatory oversight as standardized option and futures contracts do currently … more regulation may make profits a little more difficult to earn, but the risk to the system is far too great not to tighten things up again.

I also agree that companies should be allowed to fail, but with the caveat that a) there must be an ORDERLY wind-down of their business, and b) if Federal monies are used to backstop the company while it’s being wound down and liquidated (in the case of a Chapter 7 bankruptcy filing), then the Feds become the MOST senior stakeholders and are repaid first from any liquidations or other proceedings.

I like the company I work for a lot, but I think we have a responsibility not only to our shareholders and clients, but to help prevent financial disasters from occurring … especially in today’s global economy where systemic problems in one nation can very easily spillover and affect other nations as well.

But that’s just me and my left-wing liberal attitudes … the fact that a Wall Street CEO is calling for reform at all is a near miracle and definitely a step in the right direction, even if those calls don’t go far enough by my standards; and that’s impressive to me.