Large banks have increased both the size and quality of their capital buffers: The ratio of common equity to risk-weighted assets at large banks has increased by half relative to the pre-crisis average. It is now close to levels seen at  -5smaller banks, although the risk-weighted capital ratio at large banks has moved down somewhat over the past year (figure 4).
In addition, insurers appear generally well capitalized; broker-dealers, including those not affiliated with large bank holding companies, have reduced their leverage; and the outstanding values of funding vehicles that embed significant leverage, such as certain securitized products, are much lower. In contrast, there has been some evidence of rising use of leverage by hedge funds over the past year and a half.