World's elite gathers for Davos 2014

Strategy in place, results not there yet: Morgan CEO

Morgan Stanley's 'core' strategy for new Wall Street

Wall Street is in the biggest transition since the 1933 Glass-Steagall Act, and Morgan Stanley has put a strategy in place that's working, but the full results are not there yet, Chairman and CEO James Gorman said on CNBC's "Squawk Box" on Wednesday from the World Economic Forum in Davos, Switzerland.

The stock was up 60 percent last year and the credit-worthiness of the company is back, he added. (Click here to get the latest quote.)

"Wall Street is probably in the biggest transition over, say, the past four or five years, than we've [been] in 75 or 78 years since the Great Depression, since Glass-Steagall. So [an] enormous about of strategic change" has been needed, Gorman said.

Bond and commodities trading businesses had a rough year in 2013, he said. "If you had a strong equities franchise, a strong asset management-wealth management business, you do much better. And that's where we came out," he said.

"We've got $1.9 trillion of folks' money," he said—adding that that allows Morgan Stanley to put a lot of resources behind its products and services.

But rolling the dice with someone else's capital is a really bad business model, he said, "and investors don't like it."

Gorman also commented on rival JPMorgan's recent settlements with the government: "The decision to buy Bear Streans and Washington Mutual, which ... helped the American financial system, was made by the support, if not the request of the U.S. government, was both a bold decision [and] generally a positive decision for the markets, but it had consequences."

"Jamie [Dimon] is a great guy," Gorman added. "We need strong financial institutions in the U.S., no question about it. So we should be celebrating when our banks are doing well."

Gorman had this to say about the hot water some Wall Street firms find themselves in over hiring the children of China's elite: "Hiring somebody who's a child of somebody in government is not a bad thing. There are a lot of talented people who come from those families. All you have to do is have the appropriate conflict controls." He added, "It could be China or it could be in the U.S. It makes no difference."

Gorman was also asked for suggestions on who should be on CNBC's 25 most influential business leaders list that the network is compiling as part of its 25th anniversary.

(You can vote, too: Who mattered thelast 25 years—and who didn't?)

"I think Hank Paulson made some of the courageous decisions in the shortest period of time [during the financial crisis] that anybody has been put under the pressure to do," he said. "TARP, I think, was extraordinary. It was innovative."

Paulson would be No. 1, Gorman said, and "probably be two and three" as well.

He put Ben Bernanke in the top five. "The troika at the time, [Tim] Geithner, Bernanke, and Paulson. This was the Yankees at the top of their game. We were lucky to have them at the plate at that point in time. Hopefully all three of them were on that list."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.