“In the case of the regulatory environment – particularly in the US – the efforts by regulators to identify Systemically Important Financial Institutions (SIFIs), and the fact that the criteria for these is still evolving and subject to change, creates an environment which may cause acquirers to pause for thought. This is particularly key if a potential deal increases the size and profile of the combined entity so it can be deemed to be a SIFI, thus making it subject to a layer of federal regulation with more stringent transparency requirements, restrictions on capital and consumer protection.

“There may be signs however that the trend could reverse. GDP growth is particularly critical in stimulating or dampening M&A. The consistent rise in the US stock markets over the last 12 months may lead firms to conclude that valuations are back at levels at which they would consider a sale and, therefore, increase the number of management teams willing to consider an offer. At the same time, the faster than expected growth in US GDP in the second quarter of 2014 may signal a return to a macro-economic environment that could stimulate expansion through M&A."