Last checked at 
(Repeats Thursday story without change)
By Alexander Smith
DAVOS, Jan 22 (Reuters) - Europe's bankers defended the bigbank model this week in Davos as the mounting cost of regulationputs a question mark over its future.
Big complex banks must now hold far more capital than in thepast because they are seen as posing higher economic risks andthey have to be easier to dismantle if they hit trouble. Thathas hurt their profitability and held back share prices.
JPMorgan, the biggest U.S. bank by assets, has facedgrowing pressure to consider a break-up, and similar questionsare being put to less profitable European rivals such asDeutsche Bank, Barclays and Credit Suisse.
JPMorgan Chief Executive Jamie Dimon last week saidsplitting his bank would be bad for the financial prestige ofthe United States, and he won support from his peers at thisweek's World Economic Forum in Davos.
"Is there a better model? Those of us who are large havealways faced questions." said Douglas Flint, chairman of HSBC, Europe's biggest bank by market value. "If we wereasked the same question (as JPMorgan on breaking up) we wouldgive the same answer."
Pressure has built on JPMorgan since it emerged in Decemberthat it could require more than $20 billion of extra capital tomeet tougher U.S. rules on big banks.
Banks around the globe are having to consider radical waysto cut costs and change their size and shape as they come out ofthe worst year since 2008 for investment banking revenues andremain under what Dimon called an "assault" from regulators.
In Europe, banks have still not returned to economic profitsince the financial crisis, according to a study by BostonConsulting Group.
Many so-called universal banks are being valued by stockmarkets at much lower than their net worth on their balancesheets, or the 'book value' of their assets.
JPMorgan shares are trading at 0.9 times the bank's bookvalue and Citigroup trades on 0.7 times. In contrast,Wells Fargo, which is mostly reliant on U.S. retail andcommercial banking, trades on 1.6 times its book value.
Barclays shares trade at 0.7 times book value and DeutscheBank trades at barely half book, whereas Lloyds Banking Group, a UK focused retail bank, trades on 1.2 times.
While banks went on the defensive in Davos, behind thescenes changes are afoot.
Deutsche Bank is considering splitting off its retaildivision and Barclays boss Antony Jenkins has said the universalbanking model is dead.
"TOO SMALL TO PROSPER?"
Universal banks benefit from selling asset management andcapital markets products to wealthy clients and companies, butbankers admit there are far fewer benefits from cost savings orcross-selling than in the past.
Many corporate clients still wanted strong national orregional firms, however, bankers said.
"We have become a global, multi-product bank because clientswant it," Deutsche Bank co-CEO Anshu Jain said during a paneldiscussion on the future of banking on Wednesday.
Despite brickbats from some politicians, there remainsstrong support for large national banks in countries includingthe United States, Germany, France and Italy.
"Shouldn't we have concerns about banks that are too smallto prosper?" said Italian Economy Minister Pier Carlo Padoan inresponse to a question from Reuters on whether banks should bebroken up.
Urs Rohner, chairman of Credit Suisse, also saw little meritin splitting firms up. "Breaking up banks will not do anythingto make the system safer," he said.
But it is investors who will ultimately call the shots ifreturns don't improve.
"The pressure to restructure is moving from the publicsector to the private sector," said Bob Penn, partner at Allen &Overy in London. "It's a cold, logical, analytical decision thatat some point the incremental costs of regulation exceed thecosts associated with breaking up." (Additional reporting by Steve Slater and Carmel Crimmins inLondon; Editing by Elaine Hardcastle)
