Exhibit 12

Morgan Stanley

Ratio of Earnings to Fixed Charges

and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(dollars in millions)

	Fiscal Year
	2007		2006		2005		2004		2003
Ratio of Earnings to Fixed Charges
Earnings:
Income before income taxes (1)	$	3,441	$	9,103	$	6,316	$	5,517	$	5,070
Add: Fixed charges, net		57,519		41,069		23,757		14,133		11,976
Income before income taxes and fixed charges, net	$	60,960	$	50,172	$	30,073	$	19,650	$	17,046
Fixed Charges:
Total interest expense	$	57,302	$	40,897	$	23,552	$	13,977	$	11,826
Interest factor in rents		217		172		205		156		150
Dividends on preferred securities subject to mandatory redemption		—		—		—		45		154
Total fixed charges	$	57,519	$	41,069	$	23,757	$	14,178	$	12,130
Ratio of earnings to fixed charges		1.1		1.2		1.3		1.4		1.4
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
Earnings:
Income before income taxes (1)	$	3,441	$	9,103	$	6,316	$	5,517	$	5,070
Add: Fixed charges, net		57,519		41,069		23,757		14,133		11,976
Income before income taxes and fixed charges, net	$	60,960	$	50,172	$	30,073	$	19,650	$	17,046
Fixed Charges:
Total interest expense	$	57,302	$	40,897	$	23,552	$	13,977	$	11,826
Interest factor in rents		217		172		205		156		150
Dividends on preferred securities subject to mandatory redemption		—		—		—		45		154
Preferred stock dividends		90		27		—		—		—
Total fixed charges and preferred stock dividends	$	57,609	$	41,096	$	23,757	$	14,178	$	12,130
Ratio of earnings to fixed charges and preferred stock dividends		1.1		1.2		1.3		1.4		1.4

(1) Income before income taxes does not include losses from unconsolidated investees, dividends on preferred securities subject to mandatory redemption, gain/(loss) on discontinued operations, cumulative effect of accounting change (net).

“Fixed charges” consist of interest cost, including interest on deposit, 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.