However, the increase in prices of risky assets in most asset markets over the past six months points to a notable uptick in risk appetites, although this shift has not yet led to a pickup in the pace of borrowing or a sizable rise in leverage at financial institutions. Leverage To start with, leverage: Regulatory capital at large banks is now at multidecade highs.
The largest banks have already met their fully phased-in capital requirements, including the conservation buffer and the capital surcharge for the global systemically important banks. Also, the largest banks have been able to meet the post-stress capital requirements in the past couple of stress-test exercises run by the Federal Reserve.