Complexity Concerns Matter Most in Merger Approvals

May 23, 2012

Dodd-Frank establishes U.S. financial stability as a critical hurdle for regulators to evaluate before approving future mergers and acquisitions.

The Federal Reserve Board has begun to illustrate how this element of the law will influence bank consolidations in two orders approving acquisition: The PNC Financial Services Group’s acquisition of RBC Bank, and Capital One Financial’s acquisition of ING Bank.

Laying the orders alongside the FRB’s final rule regarding living wills (adopted jointly with the Federal Deposit Insurance Corporation), the Financial Stability Oversight Council’s final rule and interpretive guidance regarding the designation of systemically important financial institutions, the FRB’s proposed rule to set heightened prudential standards for large bank holding companiess and SIFIs, and public statements by the FRB’s governors, they would appear to create a Rosetta Stone to foretell future regulatory determinations. To read the full analysis, please click here.