The Federal Reserve finalizes new capital requirements for major banks, and Morgan Stanley applies for reconsideration

The Federal Reserve announced on Friday that it had finalized new capital levels for the largest U.S. banks following stress testing in June, but added that Morgan Stanley (MS. N) is seeking a reassessment of its soon-to-take-effect capital levels. The new capital requirements, which take effect on October 1, will be updated if the Fed adopts a proposal under consideration to average the results of two years of stress testing. Under the annual financial stress testing for large banks, the Fed assesses how well banks perform in a hypothetical economic downturn and sets their capital buffers accordingly. Morgan Stanley is asking for a reconsideration of its results, and the Fed will release its decision by the end of September.