The US banking sector, scarred by the 2008 financial crisis and subsequent wave of bank failures, may be on the cusp of another major period of mergers and acquisitions (M&A).

Following the record number of FDIC-insured bank failures between 2008 and 2013, which spurred a surge in M&A activity, a recent report from Morgan Stanley suggests a similar trend is emerging. This resurgence is being fueled by easing recession fears and a more lenient regulatory environment.

The report, published June 9th, paints a stark contrast to the pandemic-era slowdown of 2021. During that year, the typical annual volume of 200-300 banking M&A deals plummeted to a mere 100-150, largely attributed to tighter regulations. The shift in regulatory stance and renewed market confidence seems to be paving the way for a significant increase in consolidation within the industry.

This potential upswing in M&A activity will undoubtedly reshape the US banking landscape, leading to larger institutions and potentially impacting services and competition. Only time will tell the full extent of this predicted surge.