Moreover, while much of the increase before the crisis reflected borrowing that proved unsustainable, more recent borrowing has been concentrated among households with strong credit profiles. The regulated financial sector is also more resilient, owing to far-reaching reforms as well as favorable conditions.
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).