The Bank for Financial Settlements issued a quarterly report which shows us what happens.
- Banks are better capitalized.
- They are not cutting back on lending.**
- They are cutting back on “other income,” which includes (among other things) sorts of income that lots of people find naughty, prop trading and so forth.
- Shareholders, meanwhile, are getting less cash back than they used to.
- They’re also getting lower returns: Return on assets is down 27 percent, and leverage is also down (which is what higher capital ratios mean), so return on equity is down by over 60 percent.
