As large investment banks begin reporting yet another quarter of lacklustre earnings, leading them into their sixth year of failing to earn the cost of their equity capital, it is time to recognise that the industry is in severe distress and contributing much less than it should be to economic recovery.

Since 2008, large US and European banks have been designated the principal villains responsible for the financial crisis. Accordingly they have been hit with regulatory changes that have crippled their business models, and subjected to litigation by US federal and state attorneys general for mortgage and securities fraud, foreclosure abuse, market rigging of Libor, foreign exchange rates and metals prices, tax evasion, and circumventing money-laundering rules and sanctions.