Street Calls of the Week
NEW YORK - The Federal Reserve has reduced Morgan Stanley’s Stress Capital Buffer (SCB) from 5.1% to 4.3%, effective October 1, 2025, the bank announced Tuesday. The decision comes as the financial giant, currently valued at $254 billion, maintains a strong financial position with an InvestingPro Financial Health score of "GOOD."
The adjustment came after Morgan Stanley requested reconsideration of its preliminary SCB that was announced in June 2025. With this change, the firm’s aggregate U.S. Basel III Standardized Approach Common Equity Tier 1 (CET1) ratio requirement will be 11.8%.
The bank reported that its actual U.S. Basel III Standardized Approach CET1 ratio stood at 15.0% as of June 30, 2025, significantly above the required threshold.
"Morgan Stanley appreciates the Federal Reserve’s careful reconsideration of our 2025 CCAR results," said Sharon Yeshaya, Executive Vice President and Chief Financial Officer of Morgan Stanley. "We look forward to continued constructive engagement with the Federal Reserve on the stress testing framework."
Yeshaya added that the firm remains focused on supporting global client engagement, investing in core businesses, and growing its quarterly dividend.
The Stress Capital Buffer is part of the Federal Reserve’s capital requirements for large banks, designed to ensure financial institutions maintain sufficient capital to withstand economic stress scenarios. A lower SCB requirement typically provides banks with more flexibility in capital allocation decisions.
Morgan Stanley (NYSE:MS) operates in 42 countries providing investment banking, securities, wealth management, and investment management services.
The announcement was made in a press release statement issued by the company.
In other recent news, Morgan Stanley’s stress capital buffer requirement has been lowered from 5.1 percent to 4.3 percent by the Federal Reserve Board. This adjustment followed a request from Morgan Stanley, accompanied by a detailed explanation, which led to an independent assessment by the Fed. Additionally, Morgan Stanley Investment Management has launched the Alternatives Investing Center, an online education platform aimed at helping financial advisors understand alternative asset classes and portfolio integration strategies.
The platform includes courses on private equity, credit, real estate, hedge funds, infrastructure, and venture capital. In a related development, Morgan Stanley is coordinating a potential $3 billion data center expansion for TeraWulf Inc., which is backed by Google Inc. Furthermore, Morgan Stanley and Morgan Stanley Finance LLC have approved new master note forms for future debt securities offerings. These notes may be issued under the Global Medium-Term Notes, Series I, as part of a senior indenture agreement with The Bank of New York Mellon.
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