It was not just European banks though as banks across the US soured today again. Well-known banking analyst Meredith Whitney told CNBC that the larger US banks are turning into ‘zombies’. She cited a challenging regulatory environment, increased capital requirements and episodic, rather than continuous lending demand as the drivers for a down cycle that would take the majors as much as ten years to adjust their business models. The application of the ‘zombies’ label is new; the challenges cited are not. The banks have already started with significant headcount reductions in an attempt to begin adjusting their business models. For now, market pressure on the sector remains.–Markit Credit Research, Aug. 10, 2011

There are signs that the shit is hitting the fan again. The TED spread, which measures the difference between three-month Treasurys and the three-month Libor rate, is climbing. The TED closed at 27.04 today, up 6.9%. Since July 29, just before the markets went mental, the TED closed at 16.398, which means spreads have widened 64.9% in eight days.

So what is the antidote to the zombie state Whitney is describing? You want to find growth? Innovate. I argue that there should be a wholesale adoption of banking innovation that does away with this nonsense of choke-holding the customer. Give consumers real options and delight them. That will ignite growth, and put Whitney in her place.