Morgan Stanley curbs SA-CCR impact on core ratio

Impact of early implementation far below original estimates thanks to mitigatory action

The early switch to the standardised approach to counterparty credit risk (SA-CCR) yielded Morgan Stanley a lower impact on its capital adequacy than it originally estimated.

The firm, which opted to implement SA-CCR on December 1, a month before the US-wide deadline, expected the switch to lop as much as 120 basis points off its standardised Common Equity Tier 1 (CET1) ratio without remedial actions. Instead, the adoption cost the bank 82bp in the fourth quarter of last year. 

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