Key questions from the fourth quarter earnings call conducted by Morgan Stanley on December 19, 2007.

Guy Moszkowski (Merrill Lynch): What is the timeframe and what will drive the recognition of the 100 million shares coming into the share count for EPS purposes in the fully diluted count?

Colm Kelleher: They come in August 2010; so short-term we will have a small charge upfront. Then on conversion, depending on the strike price, we will have 9.9% of the company represented by shares.

Guy Moszkowski (Merrill Lynch): As they come into or closer to the money, is there some gradual increment to the diluted shares as opposed to what happens to the book value calculation?

Colm Kelleher: There will be impact, as we come closer to the money much itself from the threshold price.

Guy Moszkowski (Merrill Lynch): How do you think at this point about your Tier 1 to assets ratio with the $5 billion included?

Colm Kelleher: We were well capitalized despite the write-downs ahead of the equity infusion. We feel even more strongly confident about that post that.

Guy Moszkowski (Merrill Lynch): What do you now viewed that ratio is?

Colm Kelleher: All I can say at this stage because we are not in a position yet to disclose until we met all our minimum regulatory requirements on Tier 1. We feel, we are adequately capitalized, and on regulatory capital, we think we have a significant access.

Guy Moszkowski (Merrill Lynch): On the remaining $5.5 billion of sub-prime related assets in the bank, did you just change the status to trading assets within the bank or did the bank sell the position to the broker dealer?

John Mack: We re-designated so we have not sold the broker dealer. The reason we have done this is to be transparent rather than taking temporary or permanent impairments through OCI and than taking a charge any permanent impairment. These assets are of a high quality, prices have been volatile in November and in some cases they went down to, for instance 93 and then rebound to 95, 96. We felt that it was much clearer to re-designate these as mark-to markets securities.

Guy Moszkowski (Merrill Lynch): What happened in the asset management unit with the SIV charges and what the interrelationship might or might not be between the SIV holding issues there and the net out close to your liquidity products?

John Mack: I do not think that out flows are related. We talk about the SIV exposure. On this currently $7.7 billion of that repeat 92% is in low risk SIV that are sponsored by banks, which we continue to support them. The exposure is down from off peak in the quarter. Our biggest risk was from four SIVs that were not sponsored by the banks. The ABCP market and its peak was $1.2 trillion has shrunk to just around about $800 billion, many money market funds owned this paper. Of the four positions we had, one was fully paid off, one is approximately two-third paid off, and one we have taken a charge against. The fourth one, we are not unduly concerned about given the credit quality of that SIV. Overall, we feel that our exposure to SIVs we are comfortable with and we are committed to managing these funds folks from safety and liquidity. We bought one significant fees out of the money market fund once materialize.

Guy Moszkowski (Merrill Lynch): Share repurchase declined materially during the quarter because you were experiencing losses and had a capital issue. Do you assume that the share repurchase is suspended for some time?

John Mack: The Board gives us discretion to repurchase shares up to a cap. It is safe to assume for the time being that we will be not exercising discretion to repurchase shares until we have clarification about the general overall climate.

Colm Kelleher: There are going to be some opportunities that will be interesting for us internationally and domestically. We just wanted to see what the best use of that capital is and we get a better feel for that. I do not think it make sense to start repurchasing shares.

Glenn Shorr (UBS): MSCI gain ran through equity. Could you talk about that from accounting perspective?

John Mack: It was a two step process, right on MSCI, and in a two step IPO you do not recognize the gain, it flows through the balance sheet that preserves the tax free nature of the spin off itself. That treatment is pursuant, if you want to be a talking about this Staff Accounting Bulletin 51. Sale of MSCI shares represents the first step in a broader corporate reorganization. After that i.e., the anticipated future tax we spin off any gain associated with the sellers required to be recorded as a capital transaction. The impact is estimated to both of pre and after-tax addition to shareholders' equity of approximately $230 million. We have options on MSCI as to whether there are other things we can do with that, but that is where we are at the moment plan.

Glenn Shorr (UBS): The $230 million was for the piece recognized, and there is another slug that would eventually run through equity. Is that correct?

John Mack: Correct.