Morgan Stanley plans to use up to $1 billion saved from cutting 4,800 jobs, around 10 per cent of its global workforce, this year to hire senior executives to beef up its presence in proprietary trading, derivatives and risk management, according to a report in the Financial Times.

The report also mentions that Morgan Stanley has been recruiting financial advisors as part of a revamp of its wealth management unit. The FT says that Morgan Stanley has hired 519 new advisors so far this year, compared with 622 for the whole of last year.

Meanwhile, a spokesman for Morgan Stanley told WealthBriefing that the firm had been, and would continue to make, appointments for its wealth management arm.

The US bank sees the current market turmoil as an historic opportunity to recruit talented staff recently laid off by rivals.

Unnamed sources say that the bank has already reinvested $400 million of the savings in salaries and bonuses of new staff. The remaining $600 million will be invested in new staff if good enough candidates can be found.

The savings will not be used to bolster the compensation of existing employees, according to the report.