Let me now turn to another important point: historical evidence seems to indicate that there is also no relationship between simple book capital ratio (or leverage as its inverse) and economic growth. Miles et al. (2011, page 6) point out that in the UK in 1880–1960 the leverage ratio was about half the level of recent decades. Similarly, Kashyap et al.
(2010, page 19) demonstrate that the book equity to book assets ratio for US commercial banks has declined substantially over time: while the ratio exceeded 50% in the 1840s, it fell steadily to reach 15% in 1930s and 6% in the 1940s.