Increased pressure on equities revenues in Europe is raising questions over the extent to which banks will have to scale back their units, with proposed regulations heightening those concerns.

Reports from consultants and market participants in recent weeks have blamed shrinking revenues on low volatility, slower than expected global economic growth and the rise of electronic trading. But pressure has become particularly acute in Europe, where fears are growing that equities businesses with be pinched further if UK and European regulators change the way sellside research is paid for.