The Fed’s “cautionary note” on bank M&A

Author: Danielle Myles | Published: 6 Mar 2012

The Federal Reserve approved the first two bank acquisitions subject to Dodd-Frank’s financial stability requirement. But the most important message in the agency’s orders is its warning to more complex M&A parties.
Instead of being heralded as a positive sign for bank M&A, last month’s approval of Capital One’s acquisition of ING Direct, which followed December’s approval of PNC’s purchase of RBC (USA), has US financial regulatory attorneys concerned over deals involving the top tier banks.
"I think it’s fair to say that the Federal Reserve has indicated it is sending a real cautionary note to large banks seeking more than the most modest acquisitions," said Sullivan & Cromwell’s H Rodgin Cohen, who acted for the seller on both deals.
"And to the banks immediately below them, somewhat of a cautionary note as to the size to which they will be...