The contrast between the performance of the big US commercial banks and High Street lenders could not be greater.
Bank earnings are soaring in the US. Morgan Stanley reported a 38 per cent rise in the third quarter, Bank of America a 64 per cent jump, Citibank a 48 per cent leap and Wells Fargo a 60 per cent rise, in spite of regulatory clashes.
The stand-out performances this autumn were driven by special factors, notably the extraordinary volume of bids and deals which has driven up investment banking fee income.
US powerhouses: Morgan Stanley reported a 38 per cent rise in the third quarter, Bank of America a 64 per cent jump, Citibank a 48 per cent leap and Wells Fargo a 60 per cent rise
Similarly to their British counterparts, the US banks have been allowed to write back provisions for bad debts taken at the start of Covid-19.
In the US, banks are enjoying a profits bonanza and financial sector share prices in New York have surged.
In London, the income of banks is sadly depleted and stock market valuations perennially disappointing.
It is extraordinary to think that 13 years have passed since the Lehman collapse helped trigger the great financial crisis.
Yet one of the nation’s biggest banks, Natwest, formerly RBS, is still 55 per cent in government hands, largely because of a stagnant share price.
The answer to this puzzle cannot simply be attributed to more advanced technology or greater entrepreneurship in the US.
In retrospect, some of the decisions taken in Britain to redress the gung-ho era of the noughties went too far, and government overreacted to the outcry over casino banking.
The UK may have been the first of the advanced economies to prop up the banks using government equity, but has never been comfortable unwinding its holdings.
Successive governments have lived in fear of being seen to have sold the taxpayer short.
The reality is that if the Treasury had been less risk-averse and willing to sell at a loss, it could have collected extra billions in corporation tax.
In Whitehall’s determination to punish the banks for their misdeeds, the lenders have been required to hold huge amounts of capital.
That inhibited their ability to make loans, which, in turn, has been reflected in some sluggish, even flat-lining economic growth.
What made this even worse was the ring-fencing which resulted from the Banking Commission and Lib Dem influence in the coalition government.
There were two distortions. It required even more capital because consumer and investment banking needed separate equity cushions and it effectively drove the UK banks off the field of play in investment banking, leaving most of the spoils to American counterparts.
Only Barclays was able to escape the worst of all this because of its Middle East rescue, without strings, and because former chief executive Bob Diamond scooped up the best of Lehman for a song before he was shown the door over Libor manipulation by former Bank of England governor Lord King.
British banks may be safer than they were before the crisis but with the exception of Barclays, and to a certain extent HSBC, they have become low performing utilities offering modest returns.
Banking may have become safer in the UK but it has also become less fit for lending purpose, risk averse and even boring.
The implosion at Chinese property group Evergrande has not proved to be a Lehman moment as some feared. Most of the losses have so far been contained in China and Hong Kong.
HSBC, which is a big mortgage and property lender across the region, has been reducing its Evergrande exposures for two years and when the balloon went up had less than $1million on its books.
UK fund manager Ashmore has not been so lucky. Assets under management have shrunk by £1.5billion, largely because of setbacks in emerging markets. Clients pulled out £729,000 from its funds.
At the core of its outflows, in a year when markets soared, was exposure to Chinese real estate, with Ashmore estimated by Bloomberg to have been holding £292million of Evergrande bonds at the end of June.
Not quite Lehman. But not all property holdings are as safe as houses.
Ikea didn’t become the ubiquitous furniture giant it is by sitting on its hands and whingeing.
Beset by supply chain disruptions, it is seeking to beat the crisis by leasing ships, buying containers and re-directing goods among warehouses to speed up deliveries.
‘It is re-steering and rerouting,’ says boss Jesper Brodin. Lessons there for some of the UK trade and industry groups pestering Whitehall for help.