"Commercial banks are slowly dying. The activities that were formerly profitable are either illegal, immoral or simply not profitable any more. And the core activities that society wants and needs are also unprofitable, at least if they are done in the way that society has come to expect – free-while-in-credit transaction accounts, inflation-level interest on deposits, fixed low margins on lending. Meanwhile, commercial banks face stiff competition from new competitors – not new banks, though there are some of these, mostly backed by large retail organisations – but an astonishing and ever-increasing range of mostly internet or phone-based providers of deposit-taking, lending and payments services. Unlike the new providers, banks are having to meet higher capital and liquidity requirements and comply with tighter regulations, while suffering margin squeeze because of low interest rates and a continual drain of dissatisfied customers. And they are still facing legal costs and fines for their past misbehaviour. It's a very tough world for banks at the moment.
And they are paying the price. The big investment banks are already breaking themselves up, and they will be followed in due course by the big universal and retail banks. What has not been achieved through regulation may yet be achieved through market forces."