if that progress continues, i believe it will be appropriate to consider removing the qualitative objection from ccar for those firms that achieve and sustain high - quality capital planning capabilities. we would continue to assess the capital planning practices of these firms as part of our ongoing supervisory processes. i would also see it as appropriate to adjust ccar ’ s assumptions regarding the balance sheet and capital distributions. these adjustments would take place in conjunction with the integration of the stress test into a firm ’ s regulatory capital requirements. leverage ratio in light of the substantial progress in the build - out of our overall regulatory capital and stress testing frameworks over the past few years, the federal reserve is taking a fresh look at the enhanced supplementary leverage ratio. we believe that the leverage ratio is an important backstop to the risk - based capital framework, but that it is important to get the relative calibrations of the leverage ratio and the risk - based capital requirements right. doing so is critical to mitigating any perverse incentives and preventing distortions in money markets and other safe asset markets. changes along these lines also could address concerns of custody banks that their business model is disproportionately affected by the leverage ratio. conclusion u. s. banks today are as strong as any in the world, as shown by their solid profitability and healthy lending over recent years. as we consider the progress that has been achieved in improving the resiliency and resolvability of our banking industry, it is important for us to look for ways to reduce unnecessary burden. we must also be vigilant against new risks that may develop. in all of our efforts, our goal is to establish a regulatory framework that helps ensure the resiliency of our financial system, the availability of credit, economic growth, and financial market efficiency. we look forward to working with our fellow regulatory agencies and with congress to achieve these important goals. 4 / 5 bis central bankers'speeches 1 see, for example, robert f. martin, teyanna munyan, and beth anne wilson ( 2014 ), “ potential output and recessions : are we fooling ourselves? ” ifdp notes ( washington : board of governors of the federal reserve system, november 12 ) ; and olivier blanchard, eugenio cerutti, and lawrence summers ( 2015 ), “ inflation and activity — two explorations and their monetary policy implications ( pdf ), ” imf working paper wp / 15 / 230 ( washington : international monetary

for cet1 to ensure a base of protection against losses. u. s. banks also have been required to meet capital conservation buffers that incentivize banking firms to keep their capital levels well above the minimums in order to maintain full flexibility to allocate profits to shareholders and employees. for the u. s. global systemically important banks ( g - sibs ), we have also imposed an additional capital surcharge designed to reduce the threat that a failure of any of these firms would pose to financial stability. stress testing the federal reserve also conducts the comprehensive capital analysis and review ( ccar ), a 1 / 5 bis central bankers'speeches stress test that assesses whether large banking firms have enough capital to withstand severely adverse macroeconomic and financial market stress. we also use this process to assess the quality of the capital planning processes of large banking firms. the u. s. bank holding companies ( bhcs ) subject to ccar have more than doubled the dollar amount of their cet1 from around $ 500 billion in 2009 to $ 1. 2 trillion in the first quarter of 2017, and have more than doubled their cet1 risk - based capital ratios from 5. 5 percent to 12. 4 percent over that period. liquidity regulation reforms the banking agencies have also required large banking firms to substantially reduce their liquidity risk. our key reforms in this area include a liquidity coverage ratio ( lcr ) that requires large banking firms to keep enough high - quality liquid assets ( hqla ) to meet net stressed cash outflows over a 30 - day period. the federal reserve has also adopted the comprehensive liquidity analysis and review ( clar ) supervisory program for evaluating the liquidity of the most systemic banking firms. in addition, the banking agencies have proposed a net stable funding ratio ( nsfr ) regulation that would help ensure that large banking firms maintain a stable funding profile over a one - year horizon. liquidity positions within the u. s. banking system have improved substantially since the financial crisis. the u. s. g - sibs increased their holdings of hqla from about $ 1. 5 trillion to about $ 2. 3 trillion between 2011 and the first quarter of 2017. the same institutions have also reduced their reliance on short - term wholesale funding from approximately 35 percent of assets in 2006 to about 15 percent of assets today. large bank resolvability reforms as required by the dodd - frank wall street reform and consumer protection act