Question: Need help answering this. The website mentioned in the problem is https://fred.stlouisfed.org/ . A leverage ratio is any one of several financial measurements that look

Need help answering this. The website mentioned in the problem is https://fred.stlouisfed.org/ .

Need help answering this. The website mentioned in the problem is https://fred.stlouisfed.org/

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 nd data on assets less liabilities, i.e. bank capital (RALACBM027SBOG), and total assets of commercial banks(TLAACBM027SBOG). Starting in January 1995 until December 2018, calculate the bank leverage ratio and create a line graph of the leverage ratio over this sample (include the graph you created with your submission). Given the path of bank leverage over time, what can you conclude about moral hazard in the banking system over the time period considered? * - Just to show how nebulous is the denition ofthe leverage ratio, the inverse of this ratio is also called a leverage ratio in other contexts

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