This is clearly an unintended effect of the 2004 regulatory changes. This excessive risk taking of European financial institutions in the U.S. markets led to their “triple” vulnerability to economic shocks. The first vulnerability is a sizable exposure to legacy assets.
A large portion of lower-quality assets such as those related to subprime loans were held by European financial institutions, and even today these institutions face the challenge of dealing with these legacy assets. The second vulnerability is their heavy reliance on wholesale dollar funding.