The Wall Street bonus club is getting smaller by the day.

John Mack, chief executive of Morgan Stanley, says he will not accept a bonus for 2007, as his firm reports its first quarterly loss ever.

Morgan Stanley lost $3.6 billion in the fourth quarter, wider than forecast, as it took an additional write-down of $5.7 billion on its holdings tied to subprime mortgages.

"The write-down Morgan Stanley took this quarter is deeply disappointing," Mack said in a statement. "Ultimately, accountability for our results rests with me, and I believe in pay for performance, so I've told our compensation committee that I will not accept a bonus for 2007."

Morgan Stanley also announced that China Investment Corp. will invest $5 billion in the firm for as much as a 9.9 percent stake. China Investment is an investment arm of the Chinese government that was formed this year and took a stake in Blackstone Group before the private equity firm went public.

The Morgan Stanley deal is the latest example of sovereign wealth funds from China, the Persian Gulf, and Singapore taking stakes in American and European financial institutions, including Citigroup and Barclays.

For the fourth quarter, Morgan Stanley reported a net loss from continuing operations of $3.6 billion, or $3.61 per share, compared with earnings of nearly $2 billion, or $1.87 per share, in the quarter a year earlier. Net revenue was a negative $450 million, compared with $7.9 billion last year

In early November, Morgan Stanley announced a write-down of $3.7 billion. Of the total $9.4 billion written down, the firm said, $7.8 billion represents write-downs of its subprime trading positions. Its remaining exposure to American subprime is $1.8 billion, down from $10.4 billion on August 31.

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