I can probably provide a few elements of response. First regulations and rates. Europe is actually several major jurisdictions: - Switzerland: they went throu

I can probably provide a few elements of response. First regulations and rates. Europe is actually several major jurisdictions: - Switzerland: they went through a near death experience during the financial crisis, with two huge banks relative to the size of the economy (UBS and Credit Suisse) that would have sunk the country if they failed. Their reaction was understandly to slash and shrink these giants to a less threatening size. UBS and Credit Suisse, once major global players and dominating asset management, are the shadow of what the once were. - UK: of the major UK banks, two went really bad during the crisis (RBS & HBOS) while the others big banks were mostly healthy. Those two banks were requested to massively deleverage (RBS pretty much exited investment banking). The other UK banks (HSBC, Barclays) were comparably healthier. There was a wish for tough regulations within the EU, however the state of European banks is generally pretty bad (particularly in Germany and Italy) which severely limited how tough european regulations could go before threatening the stability of the country. The UK didn't have that problem and therefore gold-pleated all EU regulations, requiring higher capital ratios, higher coco triggers, strict ring-fencing, massive fines, massive PPI penalties, more severe rules and timing from UK banks. It forced them to retreat from many businesses and to shrink. - rest of Europe. EU regulators generally are hostile to investment banking and the new regulations make many traditional IB activities uneconomical (in particular trading and financing trading transactions, as well as imposing various degree of ring-fencing of non IB activities). In addition, the EUR zone maintained low rates for a very long time (now going deeply negative), which adds further pressure on the profitability of EUR zone banks. In the US, regulations have been less aggressive, and the rate environment (high rates) less toxic to banks (the reason why low and negative rates are toxic to banks is that 1) the bank is a net receiver of interest rate, because it has interest paying assets and liabilities, but more assets than liabilities, and 2) because if rates turn negative, it may not be able to pass on negative rates to their depositors (negative rates on current accounts) and find themselves pocketing the difference between their assets and liabilities). However some European banks have been doing OK, like BNP Paribas or Santander. Their local regulators rather shielded them from tougher regulations. They are challenged nevertheless by the rates environment. I think the second reason is culture. US banks took losses upfront, slashed bad activities quickly and put the problems of 2008 behind them within a few years, in a typical aggressive, pragmatic american way. The culture in Europe is often to try to live with problems and hope that waiting will make them go away. Even aggressive european players like Barclays, Deutsche Bank or SocGen were very slow to react to the new environment, and were still downsizing and cutting activities long after US banks went back into bullish/expanding mode. In Italy the banks were never really restructured.