European bank business models at the regulation age

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Le Tarnec, Pierre Louis
Issue Date
MBA in Finance
Dublin Business School
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Since the 80’s, the deregulation of the financial markets as well as the development of new technologies and financial engineering, permitted the emergence of new financial activities and the globalisation of the financial markets. After the 2008 financial crisis, the world realised the lack of regulation compared to the growing influence of the financial institutions over the global economy. Seven years after the crisis, higher regulation requirements are coming into force. The aim of the regulation is to avoid such crises to recur but to noticeably impact the financial structure of the financial institutions and limit their investment capacity. This study aims to investigate if the European bank business models are successful regarding the compliance and if this success is sustainable, through the analysis of various factors. A comparison between the four European bank business models is also conducted. Additionally, five interviews (qualitative data) are included in this research. The research found that even if most of the European banking sector is financially compliant, results are different from one business model to another. In addition, the importance of regulatory policies is presented as well as the influence of market conditions on the business models. Then, the main causation of growth is explored for those four European bank business models, such as refocusing and merger & acquisitions. Author Keywords: Bank Business models, compliance