EXHIBIT 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(dollars in millions)

	Fiscal Year
	2004		2003(1)		2002(1)		2001(1)		2000(1)
Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes (2)	$	6,685	$	5,805	$	4,738	$	5,678	$	8,551
Add: Fixed charges, net		15,024		13,019		12,884		20,883		18,300
Income before income taxes and fixed charges, net	$	21,709	$	18,824	$	17,622	$	26,561	$	26,851
Fixed Charges:
Total interest expense	$	14,859	$	12,856	$	12,710	$	20,746	$	18,152
Interest factor in rents		164		163		173		162		154
Dividends on preferred securities subject to mandatory redemption		45		154		87		50		28
Total fixed charges	$	15,068	$	13,173	$	12,970	$	20,958	$	18,334
Ratio of earnings to fixed charges		1.4		1.4		1.4		1.3		1.5
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income before income taxes (2)	$	6,685	$	5,805	$	4,738	$	5,678	$	8,551
Add: Fixed charges, net		15,024		13,019		12,884		20,883		18,300
Income before income taxes and fixed charges, net	$	21,709	$	18,824	$	17,622	$	26,561	$	26,851
Fixed Charges:
Total interest expense	$	14,859	$	12,856	$	12,710	$	20,746	$	18,152
Interest factor in rents		164		163		173		162		154
Dividends on preferred securities subject to mandatory redemption		45		154		87		50		28
Preferred stock dividends		—		—		—		50		56
Total fixed charges and preferred stock dividends	$	15,068	$	13,173	$	12,970	$	21,008	$	18,390
Ratio of earnings to fixed charges and preferred stock dividends		1.4		1.4		1.4		1.3		1.5

⁽¹⁾ Certain prior-period information has been reclassified to conform to the current year’s presentation.

⁽²⁾ Income before income taxes does not include losses from unconsolidated investees, dividends on preferred securities subject to mandatory redemption and (loss)/gain on discontinued operations. Fiscal 2001 income before income taxes does not include a cumulative effect of accounting change.

“Earnings” consist of income before losses from unconsolidated investees, income taxes, (loss)/gain on discontinued operations and fixed charges, less dividends on preferred securities subject to mandatory redemption. Fiscal 2001 income before income taxes does not include a cumulative effect of accounting change. “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.