As the dust kicked up by restructuring and regulation in the aftermath of the banking crisis begins to settle, two things have become clear. The first is that market participants appear to be operating in a world where liquidity is reduced and volatility amplified, creating a potentially dangerous feedback loop between the two. The second is that, as far as capital markets and investment banking are concerned, US banks have established a very definite edge over their European rivals.
The bare statistics make this latter point as plain as day. According to data provider Dealogic, from January 2015 to October 2015, overall US investment banking revenue totalled $29.3bn, more than twice that made by their European counterparts. Over the same period, all the top five revenue-earning investment banks were from the US, which had a market share of more than 30%.