








			At December 31, 2020				At December 31, 2019
	Regulatory Minimum		Standardized		Advanced		Standardized and Advanced
Required ratios3
Common Equity Tier 1 capital ratio	4.5	%	13.2	%	10.0	%	10.0	%
Tier 1 capital ratio	6.0	%	14.7	%	11.5	%	11.5	%
Total capital ratio	8.0	%	16.7	%	13.5	%	13.5	%

1.The CCyB can be set up to 2.5%, but is currently set by the U.S. banking agencies at zero.

2.The capital buffer requirement represents the amount of Common Equity Tier 1 capital the Firm must maintain above the minimum risk-based capital requirements in order to avoid restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers. Beginning October 1, 2020, the Firm’s Standardized Approach capital buffer requirement is equal to the sum of the SCB, G-SIB capital surcharge and CCyB, and the Advanced Approach capital buffer requirement is equal to the 2.5% capital conservation buffer, G-SIB capital surcharge and CCyB.

3.Required ratios represent the regulatory minimum plus the capital buffer requirement.

Risk-Weighted Assets

RWA reflects both the Firm’s on- and off-balance sheet risk, as well as capital charges attributable to the risk of loss arising from the following:

•Credit risk: The failure of a borrower, counterparty or issuer to meet its financial obligations to the Firm;

•Market risk: Adverse changes in the level of one or more market prices, rates, indices, volatilities, correlations or other market factors, such as market liquidity; and

•Operational risk: Inadequate or failed processes or systems, from human factors or from external events (e.g., fraud, theft, legal and compliance risks, cyber attacks or damage to physical assets).

The Firm’s risk-based capital ratios are computed under both (i) the standardized approaches for calculating credit risk and market risk RWA (“Standardized Approach”) and (ii) the applicable advanced approaches for calculating credit risk, market risk and operational risk RWA (“Advanced Approach”). The credit risk RWA calculations between the two approaches differ in that the Standardized Approach requires calculation of RWA using prescribed risk weights, whereas the Advanced Approach utilizes models to calculate exposure amounts and risk weights. At December 31, 2020 and December 31, 2019, the differences between the actual and required ratio were lower under the Standardized Approach.

Minimum leverage-based capital requirements include a Tier 1 leverage ratio and an SLR. The Firm is required to maintain a Tier 1 SLR of 5%, inclusive of an enhanced SLR capital buffer of at least 2%.

The Firm’s Regulatory Capital and Capital Ratios


	At December 31, 2020
$ in millions	Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	13.2	%	$	78,650	17.4	%
Tier 1 capital	14.7	%	88,079		19.4	%
Total capital	16.7	%	97,213		21.5	%
Total RWA			453,106



$ in millions	Required Ratio1		At December 31, 2020





Leverage-based capital
Adjusted average assets2			$	1,053,310
Tier 1 leverage ratio	4.0	%	8.4		%
Supplementary leverage exposure3, 4			$	1,192,506
SLR3	5.0	%	7.4		%


	At December 31, 2019
$ in millions	Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	10.0	%	$	64,751	16.4	%
Tier 1 capital	11.5	%	73,443		18.6	%
Total capital	13.5	%	82,708		21.0	%
Total RWA			394,177



$ in millions	Required Ratio1		At December 31, 2019





Leverage-based capital
Adjusted average assets2			$	889,195
Tier 1 leverage ratio	4.0	%	8.3		%
Supplementary leverage exposure4			$	1,155,177
SLR	5.0	%	6.4		%

1.Required ratios are inclusive of any buffers applicable as of the date presented. Failure to maintain the buffers would result in restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers.

2.Adjusted average assets represents the denominator of the Tier 1 leverage ratio and is composed of the average daily balance of consolidated on-balance sheet assets for the quarters ending on the respective balance sheet dates, reduced by disallowed goodwill, intangible assets, investments in covered funds, defined benefit pension plan assets, after-tax gain on sale from assets sold into securitizations, investments in the Firm’s own capital instruments, certain defined tax assets and other capital deductions.

3.Based on a Federal Reserve interim final rule in effect until March 31, 2021, the Firm’s SLR and Supplementary leverage exposure as of December 31, 2020 reflect the exclusion of U.S. Treasury securities and deposits at Federal Reserve Banks.

4.Supplementary leverage exposure is the sum of Adjusted average assets used in the Tier 1 leverage ratio and other adjustments, primarily: (i) for derivatives, potential future exposure and the effective notional principal amount of sold credit protection offset by qualifying purchased credit protection; (ii) the counterparty credit risk for repo-style transactions; and (iii) the credit equivalent amount for off-balance sheet exposures.

Certain U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

The OCC establishes capital requirements for the Firm’s U.S. bank subsidiaries, which as of December 31, 2020 include, among others, MSBNA and MSPBNA, and evaluates their compliance with such capital requirements. Regulatory capital requirements for MSBNA and MSPBNA are calculated in a similar manner to the Firm’s regulatory capital requirements, although G-SIB capital surcharge and stress capital buffer requirements do not apply to the U.S. bank subsidiaries.

The OCC’s regulatory capital framework includes Prompt Corrective Action (“PCA”) standards, including “well-capitalized” PCA standards that are based on specified regulatory capital ratio minimums. For the Firm to remain an FHC, its U.S. bank subsidiaries must remain well-capitalized in accordance with the OCC’s PCA standards. In addition, failure by the U.S. bank subsidiaries to meet minimum capital requirements may result in certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the U.S. bank subsidiaries’ and the Firm’s financial statements.

At December 31, 2020 and December 31, 2019, MSBNA and MSPBNA risk-based capital ratios are based on the Standardized Approach rules. At December 31, 2020, the risk-based and leverage-based capital amounts and ratios are calculated excluding the effect of the adoption of CECL based on MSBNA’s and MSPBNA’s elections to defer this effect over a five-year transition period.

MSBNA’s Regulatory Capital


	At December 31, 2020
$ in millions	Well-Capitalized Requirement		Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	6.5	%	7.0	%	$	17,238	18.7	%
Tier 1 capital	8.0	%	8.5	%	17,238		18.7	%
Total capital	10.0	%	10.5	%	17,882		19.4	%
Leverage-based capital
Tier 1 leverage	5.0	%	4.0	%	$	17,238	10.1	%
SLR	6.0	%	3.0	%	17,238		8.0	%


	At December 31, 2019
$ in millions	Well-Capitalized Requirement		Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	6.5	%	7.0	%	$	15,919	18.5	%
Tier 1 capital	8.0	%	8.5	%	15,919		18.5	%
Total capital	10.0	%	10.5	%	16,282		18.9	%
Leverage-based capital
Tier 1 leverage	5.0	%	4.0	%	$	15,919	11.3	%
SLR	6.0	%	3.0	%	15,919		8.7	%

MSPBNA’s Regulatory Capital


	At December 31, 2020
$ in millions	Well-Capitalized Requirement		Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	6.5	%	7.0	%	$	8,213	21.3	%
Tier 1 capital	8.0	%	8.5	%	8,213		21.3	%
Total capital	10.0	%	10.5	%	8,287		21.5	%
Leverage-based capital
Tier 1 leverage	5.0	%	4.0	%	$	8,213	7.2	%
SLR	6.0	%	3.0	%	8,213		6.9	%


	At December 31, 2019
$ in millions	Well-Capitalized Requirement		Required Ratio1		Amount		Ratio
Risk-based capital
Common Equity Tier 1 capital	6.5	%	7.0	%	$	7,962	24.8	%
Tier 1 capital	8.0	%	8.5	%	7,962		24.8	%
Total capital	10.0	%	10.5	%	8,016		25.0	%
Leverage-based capital
Tier 1 leverage	5.0	%	4.0	%	$	7,962	9.9	%
SLR	6.0	%	3.0	%	7,962		9.4	%

1.Required ratios are inclusive of any buffers applicable as of the date presented. Failure to maintain the buffers would result in restrictions on the ability to make capital distributions, including the payment of dividends.

U.S. Broker-Dealer Regulatory Capital Requirements

MS&Co. Regulatory Capital


$ in millions	At December 31, 2020		At December 31, 2019
Net capital	$	12,869	$	13,708
Excess net capital	9,034		10,686

MS&Co. is a registered U.S. broker-dealer and registered futures commission merchant and, accordingly, is subject to the minimum net capital requirements of the SEC and the CFTC. MS&Co. has consistently operated with capital in excess of its regulatory capital requirements.

As an Alternative Net Capital broker-dealer, and in accordance with Securities Exchange Act of 1934 (“Exchange Act”) Rule 15c3-1, Appendix E, MS&Co. is subject to minimum net capital and tentative net capital requirements. In addition, MS&Co. must notify the SEC if its tentative net capital falls below certain levels. At December 31, 2020 and December 31, 2019, MS&Co. exceeded its net capital requirement and had tentative net capital in excess of the minimum and notification requirements.

Other Regulated Subsidiaries

MSSB, a registered U.S. broker-dealer and introducing broker for the futures business, is subject to the minimum net capital requirements of the SEC. MSIP, a London-based broker-dealer subsidiary, is subject to the capital requirements of the PRA, and the Morgan Stanley Europe Holdings SE Group (“MSEHSE Group”) is subject to the capital requirements of the European Central Bank, BaFin and the German Central Bank. MSSB, MSIP and the MSEHSE Group, including MSESE, a Germany-based broker dealer, have consistently operated with capital in excess of their respective regulatory capital requirements. Additionally, E*TRADE Bank and E*TRADE Savings Bank are subject to the capital requirements of the OCC, and E*TRADE Securities LLC is subject to the minimum net capital requirements of the SEC; each of these entities has consistently operated with capital in excess of their respective regulatory capital requirements.

Certain other U.S. and non-U.S. subsidiaries of the Firm are subject to various securities, commodities and banking

regulations, and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have also consistently operated with capital in excess of their local capital adequacy requirements.

Restrictions on Payments

The regulatory capital requirements referred to above, and certain covenants contained in various agreements governing indebtedness of the Firm, may restrict the Firm’s ability to withdraw capital from its subsidiaries. The following table represents net assets of consolidated subsidiaries that may be restricted as to the payment of cash dividends and advances to the Parent Company.


$ in millions	At December 31, 2020		At December 31, 2019
Restricted net assets	$	40,502	$	33,213