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Morgan Stanley

Morgan Stanley's Stress Capital Buffer Reduced by Federal Reserve

Strategic Insights

— 1 min read

The Federal Reserve announced a reduction in Morgan Stanley's Stress Capital Buffer (SCB) from 5.1% to 4.3%, effective October 1, 2025, in response to the firm's request for reconsideration of its preliminary SCB announced in June 2025. This decision results in an aggregate U.S. Basel III Standardized Approach Common Equity Tier 1 (CET1) ratio of 11.8%. The company's U.S. Basel III Standardized Approach CET1 ratio was 15.0% as of June 30, 2025. Morgan Stanley's executive vice president and chief financial officer, Sharon Yeshaya, expressed appreciation for the Federal Reserve's reconsideration and the company's continued focus on supporting global client engagement, investing in core businesses, and growing its quarterly dividend.

Key Takeaways:

  • The Federal Reserve reduced Morgan Stanley's Stress Capital Buffer (SCB) from 5.1% to 4.3%, effective October 1, 2025, in response to the firm's request for reconsideration.
  • The SCB results in an aggregate U.S. Basel III Standardized Approach Common Equity Tier 1 (CET1) ratio of 11.8%, up from 15.0% as of June 30, 2025.
  • Morgan Stanley's executive vice president and chief financial officer, Sharon Yeshaya, expressed appreciation for the Federal Reserve's reconsideration and the company's continued focus on supporting global client engagement and growing its quarterly dividend.
  • Morgan Stanley's U.S. Basel III Standardized Approach CET1 ratio increased from 15.0% to 11.8% due to the reduction in SCB.
  • The company's quarterly dividend growth is expected to continue, as stated in the press release.
  • Morgan Stanley remains focused on its core business and investing in its financial services, as mentioned by Sharon Yeshaya.
  • The company's engagement with the Federal Reserve on the stress testing framework will continue, as expressed by Sharon Yeshaya.

Statistics:

  • Morgan Stanley's SCB reduced from 5.1% to 4.3%: 1.8 percentage point reduction
  • Aggregate U.S. Basel III Standardized Approach CET1 ratio: 11.8%
  • Morgan Stanley's U.S. Basel III Standardized Approach CET1 ratio as of June 30, 2025: 15.0%
  • Percentage point decrease in U.S. Basel III Standardized Approach CET1 ratio: 3.2 percentage points

Sources:

  • (EDGAR Online via COMTEX)
  • Morgan Stanley's press release, dated September 30, 2025 (Exhibit 99.1)
  • Morgan Stanley's Annual Report on Form 10-K for the year ended December 31, 2024 (including the section on "Forward-Looking Statements")

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