WASHINGTON (Reuters) -The U.S. Federal Reserve announced Friday it had finalized new capital levels of the nation's largest banks following the June stress tests, although it added that Morgan Stanley is seeking reconsideration of its upcoming capital level.

The central bank added that the new capital requirements, which take effect on Oct. 1, would be updated should the Fed adopt a pending proposal to average the results of two years of stress tests. Under the annual stress test of large bank finances, the Fed examines how banks would perform under a hypothetical economic downturn, and sets their capital cushions in line with how severe their losses would be. Morgan Stanley is requesting reconsideration of its result, and the Fed will announce its decision by the end of September.