[Federal Reserve Agrees to Ease Morgan Stanley's Capital Requirements]
According to a report by Golden Finance, the Federal Reserve announced on Tuesday that Morgan Stanley (MS.N)'s stress capital buffer requirement has been reduced from the initial 5.1% to 4.3%. This adjustment stems from the Wall Street institution's request in August for the Federal Reserve to reconsider its annual stress test evaluation results. The multi-phase test is designed to assess the resilience of major U.S. banks during hypothetical economic downturns.
In a statement, the Federal Reserve said: 'Based on the analysis of the information submitted by Morgan Stanley, the Board determined that the estimated losses for the bank's fair value option loan portfolio were overly conservative.'
All 22 banks, including Morgan Stanley, successfully passed this year's Federal Reserve stress test, demonstrating that these institutions are capable of withstanding losses exceeding $550 billion.