Banks Get $2.6 Trillion From Deregulation, Jefferies Says

Looser regulation for US banks is expected to unlock some $2.6 trillion in lending capacity for large financial institutions, according to Jefferies analysts, cementing the richer valuation of American lenders over rivals in Europe.

Deregulation can “drive a material uplift through 2026” in lending, mergers and acquisitions and technology investment and will buoy earnings and market share, according to a Friday note from analysts including Aniket Shah and Daniel Fannon. “The capital release is likely to reinforce the valuation premium of US banks over European peers and support higher equity prices,” they wrote, citing a discussion with Fernando de la Mora, co-head of financial services at Alvarez & Marsal.