It will come as no surprise if those changes take Europe even further away from the American model.

US investment banks in particular seemed to rule the world. Remember how Goldman Sachs was hired to help sort out Northern Rock? How long ago that seems.

Meanwhile, the City of London has long prided itself on absorbing the best talent from Europe and using their skills to make billions.

But with investment banks now on the verge of a humiliating $700bn (£380bn) bailout and British lenders still too frightened to loan even to each other, the European model seems to be in the ascendancy.

Wide gap

The European response to the financial crisis has been led by the European Central Bank (ECB).

The ECB has made billions of euros available on a short term basis to ensure that banks can get cash when they need it.

This has been reasonably successful, but the ECB is not only charged with maintaining banking stability, it also has to keep inflation down.

So if Europe has lost almost as much money as America then why is it not struggling as much? The answer is something called the "traditional banking model".

That is why interest rates in the Eurozone now sit at 4.25%, compared with 2% in the US.

The wide gap between those two numbers tells a story in itself. Europe is not reeling from the financial crisis in the same way the Americans are.

Instead, Europe is having to fight slow growth and high inflation.

Traditional banking

But that does not mean Europe is completely unscathed. In fact, if you look at the total write-downs - or losses - suffered by banks worldwide since the credit crunch began, the total is about $500bn.

Of that figure approximately half has been suffered by American banks, and half by the Europeans. Asian banks are a distant and rather minute third.

So if Europe has lost almost as much money as America then why is it not struggling as much? The answer is something called the "traditional banking model".

This involves getting people to make deposits in a bank, then when the deposits are in, lending the money out. Sounds simple doesn't it?

Systemic differences

Of course, Europe has dabbled in complicated investment banking, but still the majority of financial activity is less risky than what takes place in America.

Through this more cautious approach, banks in continental Europe always have a mixed source of cash, unlike investment banks, which rely on big institutions for finance.

Big institutions are no longer lending to each other, so investment banks cannot get their hands on the money they need to meet their obligations.

The European banks have lost money too, but they can still rely - so far - on their depositors.

This systemic difference between the European and US banking system explains why Europe has no plans for a mega-money bail out on the scale of that proposed by the US government.

But while no money is forthcoming, the EU Commission will announce on Wednesday significant changes to the way financial institutions are supervised within the EU.