Morgan Stanley Says Leverage Ratio Fell Short of Minimum

Morgan Stanley, owner of the world’s largest brokerage, said it fell short of a minimum leverage ratio proposed by U.S. regulators last week that measures a firm’s ability to withstand losses.

The company’s supplementary leverage ratio, a gauge of capital to total assets, was 4.2 percent in the second quarter, below the proposed 5 percent minimum, Chief Financial Officer Ruth Porat said on a conference call with analysts today. The ratio at Morgan Stanley’s deposit-taking bank subsidiary was above the proposed 6 percent minimum, she said.