Morgan Stanley Tops List of Securities Firms

Morgan Stanley supplanted Merrill Lynch & Co. last year as the largest securities firm by total capital, ending Merrill’s 17-year reign at the top, according to Institutional Investor magazine’s April issue.

Morgan Stanley finished its 2004 fiscal year with $110.8 billion in equity capital and long-term debt, while Goldman Sachs Group climbed one place to a No. 2 ranking with $105.8 billion. Merrill Lynch slipped from first to third place with $102.6 billion at the end of last year.

“Competitive pressures are forcing securities firms to boost their capital,” Institutional Investor said in a statement announcing the rankings.

Faced with competition from big commercial banks, Wall Street firms are extending more credit and increasing proprietary trading, the magazine reported.

Morgan Stanley, which owns the Discover credit card business, was also the biggest broker-dealer in total assets with $775.4 billion.

Shares of Morgan Stanley rose 41 cents to $54.75, Merrill Lynch fell 12 cents to $55.85 and Goldman Sachs lost 33 cents to $111.76, all on the New York Stock Exchange.