The main purpose of this research is to explore the important factors that affect capital structure of the financial industry, for listed and unlisted institutes in EU countries. The most basic approach taken to test some of the relevant theories and to explore the key determinants of capital structure has been to estimate some regression equations with proxies for the unobservable attributes as explanatory and dependent variables. There is vast literature in this field using this approach despite the fact that the proxies can be hard to find and there might be confounding effects with those proxies (Titman and Wessels, 1988). This thesis also intends to use this approach due to the simplicity and power of regression analysis. Yet this paper will take into account the demonstrative power of the proxies and will include exploratory data analysis to avoid misrepresentation of key attributes.Review of literature on capital structure: – There is not general consensus on the factors affecting the capital structure of the firm. Most relevant literature focuses on companies in developed markets (Titman and Wessels, 1998; Wald, 1999 ; Booth and Aivazian, 2001; Deesomsak, 2004) successfully identified firm characteristics such as size, R&D intensity, market-to-book ratio of assets, stock returns, asset tangibility, profitability and the marginal tax rate as important determinants of corporate financing choices (Liu and Zhuang, 2009). Not many studies have been conducted recently for financial markets alone in the EU and examine the effect of policy environment on the financial structure.