In a piace entitled, ‘The Financial Sector returns to Earth’, The Economist manages to capture the current banking environment nicely.
From 1982 to 2000, a balanced portfolio of 60% stocks, 35% bonds and 5% cash delivered average real returns of 14.3%, according to BCA, compared with an average of 3.4% during the preceding 80 years. Fund-management groups and the trading desks of investment banks both benefited from this strong environment.
While the article falls short of suggesting an all out crisis, it does suggest that things have changed from what we have seen over the last 25 years.
However, he adds that “an industry that grew rapidly on the back of an
unusually long bull market may find it hard going when returns fall
back to more normal levels, and other avenues for excess profits have
been closed.” Like many other variables, the financial sector may find
itself reverting to the mean.
I am involved with a P2P Lending company, and one of the questions we constantly ask, and are asked, is whether this is a time of Banking disruption. We certainly have that moment in time where the changes in Banking, and the advent of Social Banking, certainly are appearing at precisely the same instant.
Bankwatch 
It’s a great question, though clearly the answer has an element of the yes and no. On the one hand, the basic business of banking and lending have been functioning for *thousands* of years. Some institutions have come and gone, but that’s a long time. 25year market cycles seem a blink of an eye, short-run industry fluxtuation by comparison?
But on a local minima scale, if the industry bottoms out only once in a human generation, it seems a good a time as any to get in.
Banking predates Babylon, I don’t think it’s going down the tubes for good.
@Thomas ….. I believe you are right. Rough times for now, but banking is too fundamental to life … the question in my mind nevertheless is what banking will look like.