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Investing.com -- Morgan Stanley redirected capital freed by relaxed U.S. regulations into its prime brokerage and macro trading desks during the first quarter, Chief Financial Officer Sharon Yeshaya said.
The bank deployed funds released after regulators eased the enhanced supplementary leverage ratio, a requirement that Wall Street firms said previously limited their ability to act as intermediaries in the Treasuries market during periods of stress.
"The idea was that banks would provide more liquidity in the Treasury and agency markets," Yeshaya said in an interview. "That’s what we did."
She confirmed there was "absolutely" a connection between the rule change and the firm’s investment in its trading operations.
Since President Donald Trump took office in early 2025, financial regulators have released multiple proposals to ease bank capital rules put in place after the 2008 financial crisis. The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. finalized SLR revisions in November and introduced another package of proposals last month.
Morgan Stanley was the only major Wall Street bank for which the SLR served as the binding constraint, meaning it had the least headroom against this rule compared to other capital requirements. The firm’s SLR stood at 5% at the end of the first quarter, down from 5.4% at year-end.
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