Morgan Stanley investors await Fed's buyback blessing

Morgan Stanley shareholders will find out this week whether the U.S. Federal Reserve will allow the bank to start returning capital to shareholders in a meaningful way for the first time since the financial crisis. But even if the Wall Street bank gets the Fed's blessing to buy back more shares and potentially raise its dividend, it is unlikely to hit a shareholder return target Chief Executive James Gorman set out for this year, analysts and investors said. The target, called return on equity (ROE), measures how much profit a bank makes using shareholder funds. An ROE of at least 10 percent would show that Morgan Stanley can earn enough to pay for new capital and signal that the bank is past the restructuring it needed to make after the financial crisis.

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