By Tanya Azarchs:

U.S. bank earnings for the full year and fourth quarter of 2011 reflected all that was good about the US economy, all that was bad about the global capital markets, and much that was punitive about the regulatory arena. Loan quality improved and nascent growth could be detected, but trading revenues were down, and banks staggered under $35 billion of legal charges related to mortgage loans sold and the loss of about $7 billion in revenues due to regulatory changes. As the year ended, major questions about how those three issues would be resolved still hung in the air, and promise to bedevil 2012 as well. All that leads analysts to ask, what of what we saw in 2011 will be the new normal? I believe that that is too pessimistic a view.

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