What does the future hold for European banks in a low-interest-rate environment?

Low interest rates are eroding the profitability and solvency of euro-zone banks, forcing them to now contract. What does the future hold for them? We believe they have a choice between two models: The model of Japanese banks, whose main activity is to collect deposits and lend to the government (they are no longer banks but bond funds). Euro-zone banks could be pushed to wards this model as they are no longer able to raise the capital needed to lend; The model of US banks, whose balance sheets and therefore capital requirements are small, as corporate financing has been disintermediated and household loans are transferred to the agencies or securitised.