Exhibit 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(dollars in millions)

	Three Months Ended				Fiscal Year
	February 28, 2003		February 28, 2002		2002		2001		2000		1999		1998
Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes (1)	$	1,426	$	1,347	$	4,720	$	5,734	$	8,554	$	7,756	$	5,405
Add: Fixed charges, net		2,729		2,980		12,136		20,891		18,306		12,598		13,544
Income before income taxes and fixed charges, net	$	4,155	$	4,327	$	16,856	$	26,625	$	26,860	$	20,354	$	18,949
Fixed Charges:
Total interest expense	$	2,688	$	2,936	$	11,970	$	20,755	$	18,155	$	12,487	$	13,444
Interest factor in rents		41		44		165		162		154		111		100
Dividends on preferred securities subject to mandatory redemption		22		22		87		50		28		28		20
Total fixed charges	$	2,751	$	3,002	$	12,222	$	20,967	$	18,337	$	12,626	$	13,564
Ratio of earnings to fixed charges		1.5		1.4		1.4		1.3		1.5		1.6		1.4
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income before income taxes (1)	$	1,426	$	1,347	$	4,720	$	5,734	$	8,554	$	7,756	$	5,405
Add: Fixed charges, net		2,729		2,980		12,136		20,891		18,306		12,598		13,544
Income before income taxes and fixed charges, net	$	4,155	$	4,327	$	16,856	$	26,625	$	26,860	$	20,354	$	18,949
Fixed Charges:
Total interest expense	$	2,688	$	2,936	$	11,970	$	20,755	$	18,155	$	12,487	$	13,444
Interest factor in rents		41		44		165		162		154		111		100
Dividends on preferred securities subject to mandatory redemption		22		22		87		50		28		28		20
Preferred stock dividends		0		0		0		50		56		72		87
Total fixed charges and preferred stock dividends	$	2,751	$	3,002	$	12,222	$	21,017	$	18,393	$	12,698	$	13,651
Ratio of earnings to fixed charges and preferred stock dividends		1.5		1.4		1.4		1.3		1.5		1.6		1.4

(1) Income before income taxes does not include dividends on preferred securities subject to mandatory redemption. Fiscal 2001 income before income taxes does not include an extraordinary item or cumulative effect of accounting change. Fiscal 1998 income before income taxes does not include a cumulative effect of accounting change.

“Earnings ” consist of income before income taxes and fixed charges, less dividends on preferred securities subject to mandatory redemption. “Fixed charges ” consist of interest cost, including interest on deposits, dividends on preferred securities subject to mandatory redemption, and that portion of rent expense estimated to be representative of the interest factor. The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock.