Will the final Basel III Endgame rule (or successor capital framework) issued by US bank regulators in 2026 result in a Morgan Stanley CET1 capital impact estimate of less than 100 bps?
Current Prediction
Prediction Distribution
Individual Predictions(9 runs)
Compound bet: P(rule lands by 2026-12-31) ≈ 50-55% × P(<100 bps impact | landing) ≈ 85% = ~45%. Slight downward adjustment for default-NO clause if MS doesn't disclose granularly. The dominant uncertainty is timing, not magnitude.
Tail-risk frame: federal rulemaking slips ~40-50% historically; bank trade groups may litigate; political transition risk. Bowman re-proposal helpful but not finalized. Yeshaya's 'capital neutral to modestly positive' framing implies if rule lands the impact is benign — but it has to land. ~45%.
Historical Basel timeline slippage: BIS Basel III finalized 2010 but US final rule came 2013-14 — 3-4 year delays normal. Even if regulators target H2 2026, comment-period extensions could push into 2027. Combined with disclosure granularity risk, lean NO at 40%.
Yeshaya's 'capital neutral to modestly positive' is strong signal that if rule lands MS is benign. But 'if it lands' is the question. ~45%.
Re-proposal momentum + Trump admin pressure to deregulate banks increases probability of finalization in 2026. Bowman as Vice Chair signals dovish tilt. Around 48%.
Coin-flip with slight YES lean. Rule clearly trending favorable but timing is binary risk. ~43%.
Probability rule lands and is benign: about 45%.
Bowman re-proposal favorable but timing uncertain. 42%.
Coin-flip leaning slight NO. Timing risk dominates. 44%.
Resolution Criteria
Resolves YES if the final Basel III Endgame rule (or any successor US capital framework adopted in 2026 by the Federal Reserve, OCC, and FDIC) results in Morgan Stanley publicly disclosing a fully phased-in CET1 capital impact estimate of less than 100 basis points, per company filings (10-Q, 10-K, investor presentation, or 8-K). Resolves NO if the disclosed estimate is 100 bps or higher, or if no final rule is issued by 2026-12-31. If Morgan Stanley does not provide an explicit estimate, resolution defaults to consensus sell-side estimates aggregated by FactSet.
Resolution Source
Federal Register final rule and Morgan Stanley public disclosure (10-Q, 10-K, 8-K, investor presentation)
Source Trigger
Basel III Endgame / G-SIB surcharge finalization — final rule expected H2 2026, capital impact range disclosure
Full multi-lens equity analysis