Following Fed changes, Morgan Stanley’s leverage bind to loosen
Bank chief cannot see capital requirements going up when stress capital buffer and new SLR come into effect
Morgan Stanley expects leverage-based solvency measures to stop being a binding constraint once the Federal Reserve completes its fine-tuning of post-crisis rules, opening the door to a possible reduction in required capital.
Like all big US banks, Morgan Stanley must hold enough Tier 1 capital to meet risk-based capital ratios, the Tier 1 leverage ratio and the supplementary leverage ratio (SLR).
As of Q4 2018, Morgan Stanley had to have Tier 1 capital in excess of 10.1% of standardised risk
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