Go to the St. Louis Federal Reserve FRED database, and find data on the residual of assets less liabilities, or bank capital (RALACBM027SBOG), and total assets of commercial banks (TLAACBM027SBOG). Download the data from January 1990 through the most recent month available into a spreadsheet. For each monthly observation, calculate the bank leverage ratio as the ratio of bank capital to total assets. Create a line graph of the leverage ratio over time. All else being equal, what can you conclude about leverage and moral hazard in commercial banks over time?

The leverage ratio is how much bank capital partitioned by the bank's all out assets. A bank's capital is a pad against a drop in the worth of its assets, which could drive the bank into indebtedness.

The leverage ratio, which signifies the capital requirements of banks, has filled extensively over the most recent 25 years. The leverage ratio is how much bank capital is partitioned by the bank's all-out assets. A bank's capital is a pad against a drop in the worth of its assets, which could drive the bank into indebtedness.

The public figure for leverage ratio was around which has reached to$10.8$ percent in September

• The expanded worth of public leverage ratio is an image of a hearty and sound U.S. banking and financial system. However the figure arrived at a worth of $11.7$percent in 2012, it has been floating around$10.8$ percent lately. These capital requirements have incredibly decreased the issue of moral danger which is huge inside the banking system. At the point when banks are expected to keep a base fixed extent of their resources, they don't offer how much overabundance stores to likely defaulters.