James Gorman made the comments during the institutionâs annual general meeting.
He was quoted by Reuters as saying that Morgan Stanley backed âstrong and effectiveâ regulatory reform while no institution should be deemed âtoo-big-to-failâ.
Mr Gorman told the meeting that the banking industry needs to regain the confidence of the public.
âIt's important that we acknowledge the mistakes that were made in recent years. We need to understand why people are so angry at Wall Street," he explained.
The current CEO also had to defend himself from accusations that his predecessor, John Mack, now chairman, remained the driving force behind the firm.
Mr Mack said that he would tender his resignation from the position if his successor informed him that this was the case.
He said: âI told James if at any point Iâm in his way, he needs to let me know and I will resign.â
Morgan Stanley received a $10 billion bailout from the government in 2008 as part of the fiscal stimulus it received to survive the financial crisis.
By Jim Ottewill