Morgan Stanley 2014 Annual Report Download - page 265

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the Company’s capital measures under the respective regulatory capital framework,
including the minimum regulatory capital ratios at December 31, 2014 and December 31, 2013.
At December 31, 2014 At December 31, 2013
U.S. Basel III
Transitional/
Advanced
Approach
Minimum
Regulatory
Capital
Ratio(1)
U.S. Basel I(2)
Minimum
Regulatory
Capital
Ratio(3)Amount Ratio Amount Ratio
(dollars in millions)
Regulatory capital and capital ratios:
Common Equity Tier 1 capital/Tier 1 common
capital .................................. $ 57,324 12.6% 4.0% $ 49,917 12.8% N/A
Tier 1 capital .............................. 64,182 14.1% 5.5% 61,007 15.6% 4.0%
Total capital ............................... 74,972 16.4% 8.0% 66,000 16.9% 8.0%
Tier 1 leverage ............................. — 7.9% 4.0% — 7.6% 4.0%
Assets:
RWAs .................................... $456,008 — N/A $390,366 — N/A
Adjusted average assets ...................... 810,524 — N/A 805,838 — N/A
N/A—Not Applicable.
(1) Percentages represent minimum regulatory capital ratios under U.S. Basel III.
(2) The standards applicable in 2013 included U.S. Basel I as supplemented by Basel 2.5. The Company’s Tier 1 and total risk-based capital
ratios, Tier 1 leverage ratio and RWAs at December 31, 2013 were calculated under this framework.
(3) Percentages represent minimum regulatory capital ratios under U.S. Basel I as supplemented by Basel 2.5.
The Company’s U.S. Subsidiary Banks. The Company’s U.S. Subsidiary Banks are subject to similar regulatory
capital requirements as the Company. Failure to meet minimum capital requirements can initiate certain
mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the
Company’s U.S. Subsidiary Banks’ financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Company’s U.S. Subsidiary Banks must meet specific capital
guidelines that involve quantitative measures of the Company’s U.S. Subsidiary Banks’ assets, liabilities and
certain off-balance sheet items as calculated under regulatory accounting practices.
The table below sets forth the capital information for MSBNA at December 31, 2014 and December 31, 2013:
At December 31, 2014 At December 31, 2013
U.S. Basel III Transitional/
Basel I + Basel 2.5 Approach Required
Capital Ratio(1)
U.S. Basel I(2)(3) Required
Capital Ratio(1)Amount Ratio Amount Ratio
(dollars in millions)
Common Equity Tier 1 capital .... $12,355 12.2% 6.5% N/A N/A N/A
Tier 1 capital .................. $12,355 12.2% 8.0% $11,086 14.6% 6.0%
Total capital .................. $14,040 13.9% 10.0% $12,749 16.8% 10.0%
Tier 1 leverage ................ $12,355 10.2% 5.0% $11,086 10.8% 5.0%
N/A—Not Applicable.
(1) Capital ratios required to be considered well-capitalized for U.S. regulatory purposes.
(2) The standards applicable in 2013 included U.S. Basel I as supplemented by Basel 2.5. The Company’s U.S. Subsidiary Banks’ Tier 1 and
total risk-based capital ratios, Tier 1 leverage ratio and RWAs at December 31, 2013 were calculated under this framework.
(3) MSBNA ratios have been restated to reflect certain amendments to its regulatory reports.
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