The Dramatic Fall of European Investment Banks in the US (FT article)

The article provides a pretty solid analysis of the struggles all the European banks face in the US:

*Whether the pre-crisis years were a boom or not for European banks in the US, many executives believe that the seeds for their decline were laid in that period.

“European banks had a false dawn,” says one senior investment banker, adding that from 2012 to 2019 their fortunes went down in a “straight vertical line”.

European policymakers say the region’s banks were allowed to take excessive risk. Unlike in Europe, the US has had an absolute cap on leverage since 1981. European banks expanded their balance sheets to 60 times their common equity in the run-up to the crisis, versus 35 times leverage at their US peers, as they built up far bigger trading exposures. 

“(There were) abject failures of supervision. Partly regulatory failures as well,” says one former official.

In the decade since the crisis, the relative weakness of the European economy compared with the US has left the continent’s banks at a disadvantage and given their American rivals more resources to expand.*

https://amp.ft.com/content/68f8d7a6-56fb-11ea-a528-dd0f971febbc