Europe bank bosses yearn for M&A as U.S. dealmaking expected to take off

European bank executives are hoping for more business activity on the continent, as mergers and acquisitions in the United States are expected to pick up under the new Trump administration.

Steven van Rijswijk, CEO of Engthe largest bank in the Netherlands, said that there are too many banks in Europe, adding to the inefficiencies of the financial system of the European Union.

“I think there are too many banks in Europe for an efficient capital system,” he told CNBC at the World Economic Forum in Davos, Switzerland.

His comments come amid speculation about whether UniCreditthe sixth largest bank in Europe by market capitalization, will be allowed to merge with CommerzbankGermany’s second largest bank.

The Italian lender holds a stake in the German bank through a proxy and is currently awaiting approval to increase its stake from the European Central Bank. If allowed, it will be one of the biggest cross-border deals in European banking for years, but it’s coming political headwinds.

CEOs hit out at regulators in the European Union over what they perceive as excessive regulation at a time of heightened global competition. Many fear that the United States will pave the way for its companies around the world by lowering barriers, while the European Union imposes even more rules.

The CEO of ING bank also suggested that fragmented laws across Europe were hindering a more efficient banking system, in stark contrast to the United States.

“We also see in Europe that there are different regulations on different elements,” said van Rijswijk. “Talking about anti-money laundering, GDPR or cyber, there are differences in Europe that prevent it [the] efficient way of banks doing business with our customers”.

“Consolidation, even through the compartmentalization of regulation, I believe will be largely in the individual markets,” he added.

However, Sergio Ermotti, CEO of the Swiss bank UBSwhich operates a large wealth management division in the United States, suggested that while the United States authorities are unlikely to water down the rules for large banks, the policy position taken by regulators under the new administration of Trump is likely to see the deal revived among many small and regional banks.

“What will be allowed, probably, is the consolidation in the United States first of all, among the banks of the second level. It will rationalize a little bit of that aspect. And this, in turn, will create opportunities,” Ermotti told CNBC in Davos .

“I don’t think we’re going to see a lot of deregulation,” added Ermotti, who leads UBS through its forced takeover of competitor Credit Suisse. But he said he expects a “streamlining” of existing regulations instead.

José Viñals, president of Standard Charteredhe said he is hoping for a “thoughtful” deregulation in Europe rather than a water down the rules for that.

“I think that some thoughtful deregulation could also be good, for example, for other parts of the world. I’m thinking of the European Union,” Vinals told CNBC. StanChart is a London-listed bank, but derives most of its profits from Asia.

“This is something that will be positive for growth. But those policies, we know that they are difficult to implement, but they are not impossible,” he added.

Similarly, Adena Friedman, CEO of Nasdaqsaid Europe is unlikely to see the benefits of a Capital Markets Union – a unified regulatory framework for capital, like the US – unless smaller regulators grant powers to a pan-European regulatory agency.

“There are layers and layers of regulation” in Europe, Friedman told CNBC’s live audience in Davos.

Europe will have to decide “which elements of society and community should be regulated by a national regulator, and which elements should be regulated by a regional regulator,” said the Nasdaq boss. Apart from New York, the company operates exchanges in Sweden, Denmark, Finland and Iceland.

“You have national regulation and regional regulation. This is going to change,” he said. “It’s very solvable, it’s just a matter of will.”