Morgan Stanley received a clean bill of health from the feds, yet analysts at credit rating agency Egan-Jones reckon the investment bank could need more help than advertised to survive.

Egan-Jones reported in a note that Morgan Stanley requires $40 billion in new capital to make it through the rest of the recession.

The number contrasts with the government’s stress-test results, which claimed the bank would need just $1.8 billion in additional funds.

At issue is how much capital Morgan Stanley has in relation to its total assets, according to a report on the financial blog of The New York Times. The wider the disparity between assets and capital, the more at risk the firm is.

To reduce risk to satisfy investors, Morgan Stanley has been selling assets and raising new capital, or, in Wall Street-speak, "deleveraging."

During the past 12 months, Morgan Stanley has nearly halved the amount of assets on its balance sheet, to $626 billion from about $1.1 trillion, according to the Times.

Egan-Jones, however, said that although Morgan Stanley has trimmed the assets on its balance sheet, it still is at economic risk.

“That’s a massive decline in its asset base at a time when it is very difficult to delever,” Sean Egan, one of the firm’s founding principals, told the Times' DealBook blog.

Firms like Lehman Brothers and Merrill Lynch were able to send the toxic assets out the door last year by self-financing the deals and even by guaranteeing the losses. So while the assets were technically off the balance sheets, the firms still had an "economic interest" in those assets because they stood to lose money if the securities blew up, said Egan.

Egan said he is unsure how Morgan Stanley was able to sell $600 billion in assets last year without reporting losses. Egan believes the investment bank transferred those assets to other vehicles in which Morgan Stanley still has holdings.

Not everyone agrees that things are still bad at Morgan Stanley.

Rochdale Securities analyst Richard Bove, according to a report on Reuters, raised his price target on Morgan Stanley, citing its brand-new balance sheet.

"The world has changed dramatically in the past two months. The month of April was a substantial improvement for financial companies compared to a very dismal March. May is better than April," the banking analyst wrote in a note to clients.