European bank bosses hungry for mergers and acquisitions as US deals expected to increase

European banking leaders are hoping for continued dealmaking activity on the continent as mergers and acquisitions in the US are expected to pick up under the new Trump administration.

Stephen van Rijswijk, Executive Director INGthe largest bank in the Netherlands, said that there are too many banks in Europe, increasing the inefficiency of the European Union’s financial system.

“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 came amid speculation that 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 trustee and is currently awaiting approval from the European Central Bank to increase its stake. If allowed, it would be one of the biggest cross-border deals in European banking in years, but it faced political headwinds.

CEOs hit back at regulators in the European Union over what they see 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 regulations.

ING’s CEO also suggested that disparate laws across Europe prevent a more efficient banking system, unlike in the United States.

“We also see that in Europe there are different rules for different elements,” van Reiswijk said. “Whether it’s anti-money laundering, GDPR or cyber, there are differences in Europe that hinder the effective way banks do business with our customers.”

“I believe that consolidation, including due to the disparity of regulation, will mainly take place within individual markets,” he added.

However, Sergio Ermotti, chief executive of the Swiss bank UBSwhich runs a major wealth management unit in the United States, suggested that while US authorities are unlikely to relax rules for big banks, the political stance of regulators under the new Trump administration is likely to see deals between several smaller and regional banks.

“What will probably be allowed is consolidation in the US, primarily among tier two banks. Streamline this aspect a bit. And that, in turn, will create opportunities,” Ermotti told CNBC in Davos.

“I don’t believe we’ll see much deregulation,” added Ermotti, who runs UBS through the forced takeover of rival Credit Suisse. But he said he expected a “streamlining” of existing regulation instead.

Jose Viñales, Chairman Standard Charteredsaid he rather hopes for “thoughtful” deregulation in Europe a relaxing the rules for the sake of it.

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

“This is what will promote growth. But we know that this policy is difficult to implement, but it is not impossible,” he added.

Likewise, Adena Friedman, executive director Nasdaqsaid Europe is unlikely to see the benefits of a capital markets union – a single regulatory framework for capital like the United States – unless smaller regulators cede powers to a pan-European regulatory agency.

“There are multiple layers of regulation in Europe,” Friedman told CNBC live in Davos.

Europe must decide “which elements of society and community should be regulated by a national regulator and which elements should be regulated by a regional regulator,” the Nasdaq boss said. In addition to New York, the company manages stock exchanges in Sweden, Denmark, Finland and Iceland.

“You have national regulation and regional regulation. That has to change,” she said. “It’s very decisive, it’s just a matter of will.”