Opinion: No matter who wins the Office this November, the next two years might be good for M&A deals among US banks.

There are several reasons why this might be a good two-year period for M&A in the US. Foremost, market incentives for starting a decreased interest rate. And highly likely that the Federal Reserve will decrease to the level as low as 3.50% if the core CPI continues their trajectories. Thus, cheaper funds are always the driver for acquisitions.Secondly, the lower interest rate will definitely deteriorate Net Interest Income (NII), for all banks, no matter the size, and larger banks will need to soften their gaps in revenue.

Moreover, smaller and medium banks are in tighter budgets for implementing new features and going digitalization, and have already higher cost-to-income coefficients than their larger rivals. Meanwhile, top-tier banks continue to increase their market share and penetrate further due to digital banking.

Last but not least, in case Kamala Harris wins the Office, the new administration under the new POTUS will push the US Congress to increase corporate tax, now it's mentioned to 28%, but politicians are always in line with big corporations, here read as ''large taxpayers"'. And some big rivals might use M&A deals to decrease their income by buying less efficient and less profitable regional banks, might even with a red number bottom line. Even if Trump returns to the Oval Office, which is less obvious after the last presidential debates, and keeps his promise not to increase corporate tax, we will definitely see more M&A deals during his next term.

And yes, considering the Federal Reserve last movement that reducing Tier 1 requirements under the Basel Endgame for US globally systemically important banks (G-SIB) from 19% increase to 9% gives more perception to anticipate that other BASEL's capital and liquidity requirements for US banks will be postponed or loosen too..