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Do the challenges in Europe have a knock-on effect on U.S. banks?
Oh, yes, very much. They've really decapitalized much of the banking system in Europe. You're talking about government-supported banks with almost no private-sector capital, really, in these areas. It's still too dangerous to play there. You don't see entrepreneurs starting new banks in the U.K.
What banks in Europe could be affected negatively?
The state sector is either going to support the banks in the case of France and Germany, or in the case of Ireland and the U.K., they may actually restructure and take apart these banks and then try and entice private equity to come in and help them.
You're cautious on U.S. banks, too.
You have margin compression. You don't have any pricing power. You don't have a lot of demand, frankly, for bankers, and banks' costs are starting to go up for a variety of reasons.
Do you subscribe to the idea that we are not clearing our markets like we used to? Are we trying to have a pain-free crisis?
Yes, exactly. You buy time with interest rate policy, and we have pushed trillions of dollars worth of subsidies through the banks, but they're still deflating because we are muddling along and unfortunately, you don't get growth. You don't get job creation because the top four banks can't grow, Tom. They've got to retrench.