Morgan Stanley ( MS) continued to talk about how safe it is in its first-quarter earnings report Wednesday, but that does not appear to tell the whole story about why it made less money than Goldman Sachs ( GS).

Morgan Stanley reported a loss in the first quarter, in contrast to other large banks such as Goldman, Bank of America ( BAC) and JPMorgan Chase ( JPM). But like those banks, and others, including Citigroup ( C), it got a big boost to revenues from fixed-income trading.

A large portion of the gain looks to come from banks acting as middlemen, capitalizing on increased trading activity and higher "spreads" -- the difference between what a buyer will pay and a seller will offer for a particular bond, according to Tim Sangston, fixed-income consultant at Greenwich Associates.

"It's kind of a double whammy, where volumes are up, and the quality of the volumes are improving from the dealers' point of view," Sangston says.

But Morgan Stanley did not do as well as its rivals in fixed-income trading, judging from an exchange between CFO Colm Kelleher and BofA analyst Guy Moszkowski during the company's earnings call on Wednesday.

Referring to fixed income, Moszkowski alluded to some calculations he had made in order to compare the results of different firms, and then said, "it still seems like you're running significantly lower than Goldman, Citi or JPMorgan, and I'm wondering, despite the fact that you say you're seeing improvement in market share, whether there's something in terms of risk appetite or something else that might be driving that."

"Definitely, it is about risk appetite," Kelleher replied, adding, "We did not see on a risk-adjusted basis this quarter, the sort of opportunities that others may or may not have seen."

The exchange is consistent with the cautious note Morgan Stanley has sounded ever since October, when its shares fell into the single digits on concerns it did not have a stable funding model.

The difference between Goldman and Morgan Stanley does not all appear to be about risk, however. While Goldman does look to be taking more risk, it also appears to be making more money on a risk-adjusted basis.

Goldman's "value at risk," -- a widely used number to measure the amount of risk firms take on a daily basis -- was $240 million in the quarter. That compares to $115 million for Morgan Stanley. However, Goldman earned $6.56 billion in fixed income trading in the quarter versus $2.3 billion for Morgan Stanley, even adjusting for an accounting oddity that hurt Morgan Stanley's results. In other words, Goldman took 2.09 times as much risk, but made 2.85 times as much money.

These numbers can be debated. Value at risk, for example, includes more than just fixed income, and numbers like value at risk or even fixed income trading revenues include and exclude lots of factors that can muddy the picture. That said, analysts were generally impressed with Goldman's performance in fixed income in the first quarter.

A Morgan Stanley spokesman declined to comment.

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