IN FACT, THEY'RE UNDERLEVERAGED...:

Complaint: The banks are still overleveraged.

This objection stems from the fact that capital ratios (a way of measuring the cushions banks have against losses) aren't as big as some reformers would like them to be. As Anat Admati wrote in the New York Times last month: "We will never have a safe and healthy global financial system until banks are forced to rely much more on money from their owners and shareholders to finance their loans and investments."

Admati is right about a lot. But she's being overly cynical here. Banks are, in fact, much better capitalized than they were in 2008, thanks to Basel III and other standards put in place since the crisis. As the below chart shows, equity-to-asset ratios among the big banks are at their highest point in 25 years. Tier 1 capital ratios (a slightly better equity-to-asset measure that uses risk-weighted assets) are also high relative to historical norms. Even David Dayen, who doesn't think Wall Street has changed much since 2008, concedes that "Dodd-Frank and Basel III have made marginal improvements" to the quality of banks' capital structures.

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