European bank bosses crave mergers and acquisitions as US deals wait to take off

European banking leaders expect increased deal activity on the continent as mergers and acquisitions in the United States are expected to increase under the new Trump administration.

Steven van Rijswijk, CEO of INGThe largest bank in the Netherlands, said there are too many banks in Europe, adding to the inefficiencies of the European Union’s financial system.

“I think there are too many banks in Europe for an efficient capital system,” he told CNBC at the World Economic Forum in Davos, Switzerland.

His comments come amid speculation about whether UniCréditoEurope’s sixth largest bank by market capitalization, may merge with commercial bankthe second largest bank in Germany.

The Italian lender has a stake in the German bank through a proxy and is currently awaiting approval from the European Central Bank to increase its stake. If allowed, it would be one of the biggest cross-border deals by European banks in years, but it has run into problems. political headwinds.

CEOs have attacked regulators in the European Union for what they perceive as excessive regulation at a time of greater global competition. Many fear that the United States will pave the way for its companies globally by reducing barriers, while the European Union imposes even more rules.

The chief executive of ING bank also suggested that fragmented laws across Europe were hampering a more efficient banking system, in stark contrast to the United States.

“We also see in Europe that there are different regulations on different elements,” van Rijswijk said. “Talking about anti-money laundering, GDPR or cyber, there are differences in Europe that hinder the efficient way banks do business with our customers.”

“I believe that consolidation, also due to the compartmentalization of regulation, will largely occur within individual markets,” he added.

However, Sergio Ermotti, CEO of the Swiss bank USBwhich operates a large wealth management division in the United States, suggested that while US authorities are unlikely to relax rules for big banks, the political stance taken by regulators under the new Trump administration is likely to see them revived. the agreements between several small banks and regional banks.

“What will probably be allowed is consolidation in the United States, first of all, among the second-tier banks. Rationalize that aspect a little bit. And that, in turn, will create opportunities,” Ermotti told CNBC in Davos.

“I don’t think we’re going to see much deregulation,” added Ermotti, who runs UBS through his forced acquisition of competitor Credit Suisse. But he said he hopes for a “rationalization” of existing regulation.

José Viñals, chair of Chartered Standardsaid he is hopeful for “considered” deregulation in Europe rather than to soften the rules for the sake of it.

“I think well-thought-out deregulation could also be good, for example, for other parts of the world. I’m thinking of the European Union,” Viñals told CNBC. StanChart It is a bank listed in London but makes most of its profits from Asia.

“This is something that is going to be positive for growth. But we know that these policies are difficult to implement, but not impossible,” he added.

Likewise, Adena Friedman, executive director of NasdaqHe said Europe is unlikely to see the benefits of a Capital Markets Union (a unified regulatory framework for capital, like the United States) unless smaller regulators give powers to a pan-European regulatory agency.

“There are layers and layers of regulation” in Europe, Friedman told CNBC’s live audience in Davos.

Europe has to decide “what elements of society and community should be regulated by a national regulator and what elements should be regulated by a regional regulator,” the Nasdaq chief said. In addition to New York, the company operates stock exchanges in Sweden, Denmark, Finland and Iceland.

“There are national and regional regulations. That has to change,” he said. “It’s very solvable, it’s just a matter of will.”