As the Wall Street banks report quarterly results this week, Standard & Poor's has released a report showing US investment banks are leaving their European partners trailing in the dust.
Since the recession, the UK's banks such as RBS and Barclays, have scaled back their investment operations leaving their American rivals like Goldman Sachs, Bank of America Merrill Lynch, JP Morgan and Morgan Stanley to swoop in.
Standard & Poor's credit analyst Stuart Plesser puts success in the capital markets down to their growth.
He said: “The largest US banks have continued to forge ahead in the capital markets business, picking up market share as most European peers reduce this activity, unable to make adequate returns, choosing to use capital in other business lines.”
The banks that can stay in the capital markets game may be rewarded as competitors continue to exit. We believe US banks are better positioned than their European peers to capture capital market activity in the US, where the market is much larger, has higher margins, and currently has more economic activity (particularly merger and acquisitions) than European markets.
According to the ratings agency, capital markets activity remains an important source of revenue for the largest global investment banks, accounting for roughly 32 per cent of total revenue in the first half of 2015, up from 29 per cent for the whole of 2014.
However the recent market volatility over the summer has eaten into global banks' capital markets revenue, which S&P suggests will fall as much as five per cent for the full year from last year.