Following Fed changes, Morgan Stanley’s leverage bind to loosen

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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