Bank capital is important since it constrains bank owners $($and their agents, the bank managers$)$ from engaging in risky lending at the depositors and FDIC expense, i$.$e$.$ moral hazard. The idea

being that the more the owners of the bank have contributed to the bank's operation, the more they have to lose in the face of a liquidation.

A leverage ratio is any one of several financial measurements that look at how much capital a firm holds in relation to its total assets. For our purposes we define the bank's leverage

ratio as equity capital divided by total assets.$*$

Go to the St$.$ Louis Federal Reserve FRED database, and find data on assets less liabilities, i$.$e$.$ bank capital $($RALACBM$027$SBOG$),$ and total assets of commercial banks$($TLAACBM$027$SBOG$).$

Starting in January $1973$ until December $2021,$ using the FRED web$-$based graphing tool $($not the Excel add$-$on$),$ calculate the bank leverage ratio and create a line graph of the leverage

ratio over this sample $($include the graph you created as part of your submission$).$

Given the path of bank leverage since $2006,$ what can you conclude about moral hazard in the banking system over that time period?

$*-$ Just to show how nebulous is the definition of the leverage ratio, the inverse of this ratio is also called a leverage ratio in other contexts.

INCLUDE A SCREENSHOT OF THE GRAPGH YOU CREATED AS PART OF YOUR SUBMISSION $!!!!$