U.S. banks continue to dominate global capital markets, and the gap with their European peers shows little sign of closing, despite recent progress by some lenders on the continent.
Over the past decade, major U.S. investment banks have generated returns on equity of roughly 10%, compared with about 7% for large European peers. The difference has been driven largely by stronger investment banking and trading revenues in the United States, where deeper domestic capital markets, scale advantages and sustained technology investment have reinforced market leadership.
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According to Dealogic data, U.S. banks have occupied the top five global investment banking revenue slots for much of the past decade, underscoring how difficult it has been for non-U.S. firms to compete at scale.
European banks entered that period from a weaker starting point. Many spent years restructuring, de-risking and retrenching from capital-intensive or volatile businesses following the global financial crisis and the euro zone debt turmoil.
Deutsche Bank exited global equities trading in 2019, while HSBC Holdings said in 2025 it would wind down parts of its mergers and acquisitions and equity capital markets operations in Europe and North America.
That retrenchment allowed U.S. banks to expand market share, particularly in global investment banking and equities trading. U.S. institutions now account for more than three-quarters of global equities and fixed-income trading revenues, helped by heavy investment in technology that has sharply reduced costs per trade even as volumes have surged.
European banks have, however, begun to regain ground in selected areas. Since 2019, capital markets revenues at European lenders have grown at similar rates to their U.S. peers, albeit from a much smaller base.
Improved capital positions, stronger earnings and a “higher for longer” interest-rate environment have enabled more focused investment, particularly in regional investment banking franchises across EMEA and parts of Asia.
Even so, consolidation is unlikely to be a silver bullet. While the European Central Bank has encouraged bank mergers, national barriers and limited cross-border synergies make it hard to create a European champion with the scale to rival U.S. giants in global capital markets.
The result is a narrowing of gaps in pockets, not a convergence. European banks may strengthen their positions at home, but U.S. dominance in global capital markets looks set to persist into 2026 and beyond.
