Morgan Stanley SCB cut unlocks $4.2bn after rare Fed appeal win

Bank’s buffer falls 170bp, widening average cut across US banks subject to the regime to 66bp

The Federal Reserve has lowered Morgan Stanley’s stress capital buffer (SCB) following a formal appeal by the bank, unlocking an extra $4.2 billion in capital and marking a rare reversal of the regulator’s stress test results.

Despite the decision, the average SCB across the 31 US banks subject to the regime remained broadly unchanged at 3.6% – the lowest level since the framework was introduced