Have big banks gotten safer?

October 3rd, 2016

Lawrence H. Summers and Natasha Sarin and presented a paper titled, Have big banks gotten safer? at a BPEA conference at the Brookings Institution on September 22, 2016 stating, “Since the financial crisis, there have been major changes in the regulation of large financial institutions directed at reducing their risk. Measures of regulatory capital have substantially increased; leverage ratios have been reduced; and stress testing has sought to further assure safety by raising levels of capital and reducing risk taking. Standard financial theories would predict that such changes would lead to substantial declines in financial market measures of risk.”