EXHIBIT 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(dollars in millions)

	Three Months Ended				Fiscal Year
	February 29, 2004		February 28, 2003(2)		2003		2002		2001		2000		1999
Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes (1)	$	1,916	$	1,611	$	5,767	$	4,720	$	5,684	$	8,554	$	7,756
Add: Fixed charges, net		3,532		2,729		12,966		12,136		20,891		18,306		12,598
Income before income taxes and fixed charges, net	$	5,448	$	4,340	$	18,733	$	16,856	$	26,575	$	26,860	$	20,354
Fixed Charges:
Total interest expense	$	3,489	$	2,688	$	12,809	$	11,970	$	20,755	$	18,155	$	12,487
Interest factor in rents		43		41		156		165		162		154		111
Dividends on preferred securities subject to mandatory redemption		45		22		154		87		50		28		28
Total fixed charges	$	3,577	$	2,751	$	13,119	$	12,222	$	20,967	$	18,337	$	12,626
Ratio of earnings to fixed charges		1.5		1.6		1.4		1.4		1.3		1.5		1.6
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income before income taxes (1)	$	1,916	$	1,611	$	5,767	$	4,720	$	5,684	$	8,554	$	7,756
Add: Fixed charges, net		3,532		2,729		12,966		12,136		20,891		18,306		12,598
Income before income taxes and fixed charges, net	$	5,448	$	4,340	$	18,733	$	16,856	$	26,575	$	26,860	$	20,354
Fixed Charges:
Total interest expense	$	3,489	$	2,688	$	12,809	$	11,970	$	20,755	$	18,155	$	12,487
Interest factor in rents		43		41		156		165		162		154		111
Dividends on preferred securities subject to mandatory redemption		45		22		154		87		50		28		28
Preferred stock dividends		—		—		—		—		50		56		72
Total fixed charges and preferred stock dividends	$	3,577	$	2,751	$	13,119	$	12,222	$	21,017	$	18,393	$	12,698
Ratio of earnings to fixed charges and preferred stock dividends		1.5		1.6		1.4		1.4		1.3		1.5		1.6

(1) Income before income taxes does not include losses from unconsolidated investees and dividends on preferred securities subject to mandatory redemption. Fiscal 2001 income before income taxes does not include a cumulative effect of accounting change.

(2) Income before income taxes for the period ended February 28, 2003 has been restated. See Note 18 to the condensed consolidated financial statements.

“Earnings” consist of income before losses from unconsolidated investees, income taxes and fixed charges, less dividends on preferred securities subject to mandatory redemption. “Fixed charges” consist of interest cost, including interest on deposits, dividends on preferred securities subject to mandatory redemption, and that portion of rent expense estimated to be representative of the interest factor. The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock.