Less leverage and lower returns on assets are now likely for financial institutions.

Test: in the years after 2008 (about 2009–2013), did US financial institutions run with less leverage and earn lower returns on assets than before the crisis (2004–2006)? True: aggregate leverage fell (for example, higher equity-to-assets ratios at banks or broker-dealers) and ROA stayed below pre-crisis levels. Mostly true: both held, with a minor exception (for example, ROA close to pre-crisis levels in one year). Mixed: one held and the other did not. Mostly false: only marginal changes. False: leverage was the same or higher and ROA returned to or exceeded pre-crisis levels.

Set before the research began.

1. E1 Quarterly Trends for Consolidated U.S. Banking Organizations, Second quarter 2012 Federal Reserve Bank of New York

   “Banking industry profitability, as measured by annualized return on assets (ROA), increased from 0.73% to 0.77% in 2012:Q2. While ROA has recovered in recent years from its low of -1.82% in 2008:Q4, it remains below average precrisis levels of greater than 1%.”

2. E2 On the Scale of Financial Intermediaries (Staff Report No. 743) Federal Reserve Bank of New York · October 2015

   “Intriguingly, we have documented a structural break with the onset of the 2008 financial crisis that has subdued both the market leverage of the bank but also its book equity growth.”

3. E3 On the Scale of Financial Intermediaries (Staff Report No. 743) Federal Reserve Bank of New York · October 2015

   “For commercial banks, we observe a similar decline in trend growth, albeit at much less dramatic rates: total asset growth rate declines from 2.5% to 0.5% and book equity growth rate declines from 3.5% to 0.4% percent.”

The New York Fed's 2012:Q2 banking trends report [E1] says industry ROA had recovered from its 2008:Q4 low but, at 0.77%, was still below the average pre-crisis level of more than 1%. That supports the ROA part of the claim for the years after the crisis. A 2015 New York Fed staff report [E2] found a structural break starting with the 2008 crisis that "subdued" banks' market leverage and book equity growth. It also reports slower growth in commercial bank assets [E3]. Both parts appear to hold. However, the leverage evidence is indirect: it gives no equity-to-assets ratios for 2009–2013 compared with 2004–2006. That keeps the verdict at mostly true rather than true.