Much better, but far from being problem-free —most analysts describe the European banking system as "deleveraged and in a safer position" 10 years after the collapse of Lehman Brothers and the subsequent start of the global financial crisis.
The failure of Lehman Brothers in 2008 roiled global markets. It was the fourth-largest U.S. investment bank and when it filed for bankruptcy on September 15, 2008, it led to an erosion of nearly $10 trillion in market capitalization in global equities in the following month.
The collapse of Lehman unveiled that the bank had a huge problem with mortgage-backed securities — a kind of asset, that were in fact worth very little compared to their price. But, more broadly, Lehman's problems were almost every bank's problems.
In Europe, banks that had also taken elevated risks struggled to get funding and many had to be rescued by huge bailouts from their respective governments.
"European banks deleveraged and increased their capital ratios after Lehman, so they are in theory in a safer position than 10 years ago," Carsten Hesse, European economist at Berenberg told CNBC via email on Tuesday.
"But in some euro zone countries such as Greece or Italy, non-performing loans are still very high, causing headaches and the profitability of some banks, including in Germany, is still very low," he added.