Morgan Stanley received a vote of confidence from its largest stakeholder, Mitsubishi UFJ Financial Group.  Japan's biggest banking group, which essentially saved Morgan Stanley from collapse when it invested $9bn in October 2008, said it remains “firmly committed” to its strategic alliance with the bank, even as bank shares continue to decline sharply - 54% this year, in part intensified by Europe's debt crisis.

“The special relationship we have formed remains core to our global business strategy.” -- Mitsubishi UFJ statement.

In June, the banks converted $7.8bn of Mitsubishi's preferred shares into common stock, making the Tokyo-based bank the largest MS common shareholder with a 22.4% stake.  Mitsubishi UFJ still holds about $500mn of non-convertible 10% preferred stock.  Morgan Stanley holds an option to buy back that stake for about $572mn beginning 10/15/11.    [Bloomberg, 10/4/11]