Fed to Ease Morgan Stanley Capital Requirement After Review

The Federal Reserve lowered Morgan Stanley’s stress capital buffer requirement to 4.3%, down from an initial 5.1%, after a second look by the central bank.

The reduction, which takes effect on Wednesday, came after the Wall Street lender asked the Fed in August to reconsider its requirement under the annual stress-tests exercise, a multistep process that assesses how the nation’s largest lenders are likely to perform under a hypothetical recession.