A top U.S. bank regulator yesterday proposed new regulations for bank mergers and acquisitions (M&A) in a bid to increase transparency around the process, while ensuring some deals do not slide through automatically without sufficient scrutiny, Reuters reported. The move by the Office of the Comptroller of the Currency (OCC) comes amid industry criticism that regulators are too opaque in their handling of bank deals, and as analysts expect more consolidation among small lenders struggling with flagging margins. Monday's proposal details the types of deals that would typically secure approval and the issues that could complicate or derail transactions, Michael Hsu, the acting comptroller, told Reuters in an interview ahead of its publication. Increasing transparency around the process could speed up good deals and help banks steer clear of transactions that may hit regulatory roadblocks, he said. "You have two risks with mergers: One risk is that we approve too many mergers and therefore we're approving bad mergers. The other risk is we approve too few mergers and therefore there are good mergers that should happen that aren't," he said. "The purpose of being transparent is to encourage more accuracy on both ends." The OCC reviews mergers in which the acquiring bank has a federal charter, and the process can involve other regulators. Some mergers are problematic because the banks involved have supervisory issues, whereas banks that have a high supervisory rating with no lingering enforcement concerns are more likely to get the green light for a merger or acquisition, Hsu said.
