"Capital Rules and Regulatory Uncertainty Freeze US Bank Mergers"
U.S. banks are expected to delay mergers until at least the end of next year due to uncertainty surrounding new capital requirements and lengthy regulatory approval processes. The implementation of Basel Committee standards and potential increases in capital requirements have created a "chilling effect" on mergers. Distressed banks may be forced to sell, but the slow pace of deal approvals and political factors have hindered merger discussions. Once capital requirements are clarified, mergers could surge among regional banks close to the $100 billion asset threshold, as they seek to compete with larger institutions under stricter rules.