From the global Basel III bank regulations to the EU’s Solvency II insurance regulations, and from the UK Vickers Report to the US Dodd-Frank Act, significant change is sweeping the financial sector. This will not only alter the way individual financial institutions do business, but also the market and competitive environment in which they operate.
As a result, companies in the sector will seek to grow into areas where they can profit, and withdraw from areas where regulatory change prevents them from achieving a satisfactory return on capital. This will in turn drive merger and acquisition (M&A) activity as players sell or buy assets in order to meet these new realities. Already a number of broad impacts can be highlighted.
