Morgan Stanley 2010 Annual Report Download - page 215

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the capital measures for the Company:
December 31, 2010 December 31, 2009
Balance Ratio Balance Ratio
(dollars in millions)
Tier 1 capital ................................................ $ 52,880 16.1% $ 46,670 15.3%
Total capital ................................................. 54,477 16.5% 49,955 16.4%
RWAs ..................................................... 329,560 — 305,000 —
Adjusted average assets ........................................ 802,283 — 804,456 —
Tier 1 leverage ............................................... — 6.6% — 5.8%
Tier 1 capital ratio increased year-over-year due to an increase of Tier 1 capital predominantly driven by
earnings, partially offset by an increase of RWAs. Tier 1 leverage improved year-over-year due to increase of
Tier 1 capital predominantly driven by earnings.
The Company’s Significant U.S. Bank Operating Subsidiaries. The Company’s domestic bank operating
subsidiaries are subject to various regulatory capital requirements as administered by U.S. federal banking
agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional,
discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s U.S.
bank operating subsidiaries’ financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Company’s U.S. bank operating subsidiaries must meet specific
capital guidelines that involve quantitative measures of the Company’s U.S. bank operating subsidiaries’ assets,
liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.
At December 31, 2010 and December 31, 2009, the Company’s U.S. bank operating subsidiaries met all capital
adequacy requirements to which they are subject and exceeded all regulatory mandated and targeted minimum
regulatory capital requirements to be well-capitalized. There are no conditions or events that management
believes have changed the Company’s U.S. bank operating subsidiaries’ category.
The table below sets forth the Company’s significant U.S. bank operating subsidiaries’ capital.
December 31, 2010 December 31, 2009
Amount Ratio Amount Ratio
(dollars in millions)
Total capital (to RWAs):
Morgan Stanley Bank, N.A. .................................. $8,069 18.6% $8,880 18.4%
Morgan Stanley Private Bank, N.A.(1) .......................... $ 911 37.3% $ 602 70.3%
Tier I capital (to RWAs):
Morgan Stanley Bank, N.A. .................................. $9,572 15.7% $7,360 15.3%
Morgan Stanley Private Bank, N.A.(1) .......................... $ 911 37.3% $ 602 70.3%
Leverage ratio:
Morgan Stanley Bank, N.A. .................................. $9,572 12.1% $7,360 10.7%
Morgan Stanley Private Bank, N.A.(1) .......................... $ 911 12.4% $ 602 8.9%
(1) Morgan Stanley Private Bank, National Association (formerly Morgan Stanley Trust) changed its charter to a National Association on
July 1, 2010.
Under regulatory capital requirements adopted by the U.S. federal banking agencies, U.S. depository institutions,
in order to be considered well-capitalized, must maintain a ratio of total capital to RWAs of 10%, a capital ratio
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