James “Jes” Staley, the chief executive officer of Barclays who took over last year after a long career at JPMorgan, said that European investment banks are losing control of their own markets to U.S. rivals as they shrink and struggle to make a profit.
Bloomberg News reports that a combination of new rules, low interest rates and the costs arising from past misdeeds has placed many European investment banks “at the brink,” Staley, 59, said at a speech in Brussels. The lenders have lost about 20% of their market share across the continent in the past decade, while U.S. firms have boosted their share, he said.
“We’re about to tip over into American dominance, and if this trend continues, we risk a very near future in which Europe’s capital markets are almost entirely dependent on firms domiciled elsewhere,” Staley said. “To my mind, that’s a problem.”
Barclays is among the biggest European banks that are scaling back operations as they struggle to boost profit and meet tougher rules from regulators. Staley is firing thousands of workers, exiting businesses and selling assets, as is Deutsche Bank chief John Cryan and Credit Suisse CEO Tidjane Thiam. European authorities must remove obstacles to the growth of capital markets within the continent that will allow the region’s banks to serve as intermediaries and hold less risk on their balance sheets, he said.
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