European banks ceding share of int'l bond underwriting to US rivals

London

ANY conversation with a European bank executive these days quickly turns to talk of how their US rivals are in better shape.

American banks were much quicker in bolstering their capital bases after the financial crisis; they also have more regulatory certainty (in part because they didn't challenge every proposed rule change). And in at least one corner of the financial markets, Europeans are ceding market share at an accelerating rate.

International bond underwriting is where the biggest US and Euro-pean banks compete for the right to raise capital for the world's biggest borrowers. This year, the total borrowed has reached almost US$4 trillion.

What has become clear is that European banks are ceding this business to the US. And the consequences will b…