Since the 1920's, the ratio of assets to capital has almost tripled for commercial banks.Many economists believe this is the direct result of:

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The increase in the ratio of assets to capital can be attributed to government-provided deposit insurance, which has given banks the ability to take on more risk without fear of bank runs. With deposit insurance, customers are assured that their deposits are safe even if the bank fails, which has encouraged banks to take on more leverage by increasing their assets in relation to their capital.

Since the 1920's, the Ratio of Assets to Capital Has