After years spent clamping down on risky behavior at banks andpunishing them for past misdeeds, Europe's regulators have awokento a new worry: Lenders aren't making enough money.

Shrinking profitability has become a “concern for financialstability” because it may reduce banks' ability to recover fromshocks by generating capital or selling stock, Bank of EnglandGovernor Mark Carney said on Nov. 30. The week before, EuropeanCentral Bank (ECB) President Mario Draghi said profitability“remains a challenge to be addressed.”

The issue has come to the fore after Europe's banks endured yetanother trying year. Financial stocks tumbled from January to Julyon the back of escalated capital requirements, ultra-low interestrates, and Brexit worries, only to recoup some of those losses onspeculation Donald Trump's presidency may bring regulatoryrelief.

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