Release Date: March 2, 2017
For release at 4:30 p.m. EST
The Federal Reserve Board on Thursday announced that it will not object to a resubmitted capital plan from Morgan Stanley, as a result of progress made by the firm in addressing deficiencies identified by the Board in last year’s Comprehensive Capital Analysis and Review (CCAR).
Last June, following its review of the firm’s capital plan, the Board required Morgan Stanley to resubmit its capital plan to address certain qualitative deficiencies in its capital planning processes. Those deficiencies included weaknesses in the way the firm identifies and incorporates its material risks into its capital planning scenarios, key modeling practices, and the firm’s governance and controls related to both of those areas. The Board will continue to review and assess Morgan Stanley’s progress in addressing those deficiencies in its evaluation of this year’s CCAR submission.
The quantitative results of Morgan Stanley’s resubmission are not comparable to the CCAR results released in June 2016. The severely adverse scenario for Morgan Stanley’s resubmission was updated according to the Board’s policy and was more stringent than the severely adverse scenario used in June 2016. The Board’s scenarios are hypothetical and not forecasts.
CCAR evaluates the capital planning processes and capital adequacy of the largest U.S.-based bank holding companies, including the firms’ planned capital actions such as dividend payments and share buybacks and issuances. Strong capital levels act as a cushion to absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of stress.
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