Although the appointment of John Mack to head troubled brokerage firm Morgan Stanley is “notable”, says Fitch Ratings, it does not resolve the status for the ratings for Morgan Stanley and Discover Bank. Both firms remain on Rating Watch Negative by Fitch.

The rating agency says that resolution of the negative rating watch remains dependent upon the timing, choice and strategies of Mack and any new executive management.

Fitch says that these measures are expected to try to: stem the wave of employee departures; achieve a balance in diversification of revenues while improving the profitability of the retail brokerage and investment management segments; and, retain the strength of the Institutional Securities segment.

Capital and funding of the institution are also key factors in the ratings, particularly given the possible spin-off of Discover, the firm notes. A ratings downgrade, if it occurs, is not expected to exceed one notch.