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				Six Months Ended				Fiscal Year
	May 31, 2006		May 31, 2005(1)		May 31, 2006		May 31, 2005(1)		2005		2004		2003		2002		2001
Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes(2)	$	3,007	$	1,394	$	5,381	$	3,489	$	7,361	$	6,818	$	6,160	$	4,859	$	5,809
Add: Fixed charges, net		10,030		5,607		19,555		10,314		24,637		14,871		12,856		12,688		20,654
Income before income taxes and fixed charges, net	$	13,037	$	7,001	$	24,936	$	13,803	$	31,998	$	21,689	$	19,016	$	17,547	$	26,463
Fixed Charges:
Total interest expense	$	9,988	$	5,561	$	19,469	$	10,186	$	24,425	$	14,707	$	12,693	$	12,515	$	20,517
Interest factor in rents		42		46		86		128		212		164		163		173		162
Dividends on preferred securities subject to mandatory redemption		—		—		—		—		—		45		154		87		50
Total fixed charges	$	10,030	$	5,607	$	19,555	$	10,314	$	24,637	$	14,916	$	13,010	$	12,775	$	20,729
Ratio of earnings to fixed charges		1.3		1.2		1.3		1.3		1.3		1.5		1.5		1.4		1.3
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income before income taxes(2)	$	3,007	$	1,394	$	5,381	$	3,489	$	7,361	$	6,818	$	6,160	$	4,859	$	5,809
Add: Fixed charges, net		10,030		5,607		19,555		10,314		24,637		14,871		12,856		12,688		20,654
Income before income taxes and fixed charges, net	$	13,037	$	7,001	$	24,936	$	13,803	$	31,998	$	21,689	$	19,016	$	17,547	$	26,463
Fixed Charges:
Total interest expense	$	9,988	$	5,561	$	19,469	$	10,186	$	24,425	$	14,707	$	12,693	$	12,515	$	20,517
Interest factor in rents		42		46		86		128		212		164		163		173		162
Dividends on preferred securities subject to mandatory redemption		—		—		—		—		—		45		154		87		50
Preferred stock dividends		—		—		—		—		—		—		—		—		50
Total fixed charges and preferred stock dividends	$	10,030	$	5,607	$	19,555	$	10,314	$	24,637	$	14,916	$	13,010	$	12,775	$	20,779
Ratio of earnings to fixed charges and preferred stock dividends		1.3		1.2		1.3		1.3		1.3		1.5		1.5		1.4		1.3

(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, (loss)/gain on discontinued operations, cumulative effect of accounting change (net) and income (loss) from investments accounted for under the equity method of accounting.

“Fixed charges” consist of interest cost, including interest on deposit, 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.