Why European Banks Lose Out to U.S. Banks

The video discusses the challenges faced by American and British banks, focusing on the shift in fee revenue distribution from a 50/50 split between US and European banks to a 70/30 split favoring US banks. It highlights the struggles of European banks post-financial crisis, including regulatory challenges and the difficulty of earning their cost of capital. The discussion also covers the structural issues in the investment banking sector, emphasizing the need for change to improve profitability.

What was the approximate fee revenue distribution between US and European investment banks before the financial crisis?

• 70% US, 30% European

• 50% US, 50% European

• 60% US, 40% European

• 80% US, 20% European

Which bank was NOT considered a competitor by RBS in 2007?

• Barclays

• JP Morgan

• Goldman Sachs

• Morgan Stanley

Which of the following is NOT a regulatory challenge faced by British banks?

• Balance sheet tax

• Increased interest rates

• Ring-fencing

• Bonus caps

What is one potential strategy for investment banks to improve profitability?

• Reducing client options

• Raising prices and passing costs to clients

• Increasing government bailouts

• Expanding into new markets

What is a significant issue for European banks in their restructuring efforts?

• Excessive competition

• Timing of restructuring

• Lack of skilled workforce

• High interest rates