Summary of How Pricing Can Solve European Banking’s Earnings Crisis

Looking for the report?
We have the summary! Get the key insights in just 5 minutes.

How Pricing Can Solve European Banking’s Earnings Crisis summary
Start getting smarter:
or see our plans


8 Overall

9 Applicability

7 Innovation

7 Style


Because their costs exceed their revenues, European banks have seen negative returns since 2012. While they focus on restructuring to meet increasingly stringent regulatory requirements, these institutions have not revised their pricing to sustain profitability. According to professionals at the Boston Consulting Group, dynamic and data-driven pricing models present an opportunity to bolster the bottom line and mitigate the adverse effects of regulation. getAbstract suggests this astute technical analysis to financial executives for its diagnostic insights.

In this summary, you will learn

  • Why European banks have experienced disappointing financial results, and
  • Why market research and the use of client data can lead to product and services pricing that supports consistent profitability.

About the Authors

Carsten Baumgärtner et al. are professionals with the Boston Consulting Group.



European banks’ average cost of equity in 2016 was 12.8% against an average return of 4.1%, marking the fourth year in a row of losses. Their sorry state contrasts markedly with that of their North American counterparts, which have seen their expenses decline over the 2012–2016 period. Persistently high costs and weak revenue in the euro area have compressed margins.  

A growing body of regulatory changes under Basel III – including “higher core capital requirements, caps on leverage” and numerous new rules on derivatives – has contributed significantly to compliance costs...

More on this topic

By the same authors

Global Corporate Banking 2018
The Next-Generation Corporate Bank
Three Steps to Creating Value from B2B Discounts
"Moneyball" in Commercial Lending
The Look of a Winner

Customers who read this summary also read

The Global Risks Report 2018
World Economic Outlook April 2017
Risk Reduction Through Europe’s Distressed Debt Market
Automating the Wall Street Rainmaker
Why Wall Street Matters
The Spider Network

Related Channels

Comment on this summary