Morgan Stanley Pushes for Fed Capital Buffer Reevaluation as 164th-Ranked Trading Volume Sparks Regulatory Tensions

On August 29, 2025, Morgan Stanley (MS) rose 0.20% with a trading volume of $0.55 billion, ranking 164th in market activity. The stock’s movement coincided with U.S. Federal Reserve actions impacting its regulatory framework.

The Fed finalized updated capital requirements for major banks following its June stress tests, setting new standards effective October 1. However, Morgan Stanley has formally requested a reevaluation of its assigned capital buffer, which remains undisclosed. The bank emphasized its efforts to reduce the "stress capital buffer" and stated it is "actively engaged" with regulators to address the matter. A final decision from the Fed is expected by late September.

Historical context shows Morgan Stanley was allocated a 6% buffer in 2024, the highest among tested banks. For comparison, Goldman Sachs successfully lowered its buffer from 6.4% to 6.2% through an appeal process. The Fed indicated these requirements could be adjusted if a proposal to average two years of stress test results is adopted.

Under the annual stress test framework, the Fed assesses banks’ resilience to hypothetical economic downturns, tailoring capital cushions to projected losses. Morgan Stanley’s request highlights ongoing negotiations between institutions and regulators over risk-based capital metrics.