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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

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 of 2021 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?

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