The study provides an insight on the regulatory requirements banks have been complying with since the Financial Crisis of 2009. It focuses upon the Bank Recovery and Resolution Directive’s forthcoming full implementation and its effectiveness. An empirical analysis on the European banks’ CDS market will shed light on the mechanisms driving its current and historical evolution, emphasizing the motivations for the change in the regulatory architecture. The policies will be proved to be effective in affecting investors’ risk perception that is, a shift of risk burden from senior bondholders towards subordinated debt holders, as well as a breach of the link between banks and sovereigns’ default probabilities, the so-called doom loop. Ultimately a comparative analysis on banks’ total capital, return on equity, leverage and risk weighted assets provides evidence on the impact regulations have on the European banks’ business strategies, thereby shaping the New Normal. In conclusion the paper discusses if the current regulatory regime will be enough to prevent future sources of instability.