Wall Street greets Trump's return with greed and concern

By Milana Vinn, Echo Wang and Nupur Anand

NEW YORK (Reuters) – Wall Street executives are broadly looking forward to business-friendly regulations as they analyze the impact of a second Donald Trump presidency, while some bankers were immediately tasked with discussing possible deals.

Trump's return to power is expected to significantly ease some of the regulatory burdens the industry faced under the Biden administration, executives at banks and private equity firms said.

Smaller government, widespread deregulation and tax breaks for corporations and the wealthy are widely expected. In particular, a softer stance on antitrust and less regulation in areas such as banking and cryptocurrencies could boost corporate profits and boost deal flow, they said.

“He is pro-business and anti-regulation,” said Euan Rellie, co-founder and managing partner of investment bank BDA Partners. “His instinct is to cut taxes. All of this will help the M&A market.”

“As long as he governs with moderation and not chaos, the markets will welcome him,” Rellie said.

But some executives said this was not a given, dampening optimism.

Some bankers worried about navigating unpredictable changes in government policy, the impact of trade tariffs, a potentially dangerous fiscal path that adds trillions of dollars to the national debt and the possible tightening of visa programs.

For now, however, the reaction was euphoric. As U.S. stocks rose sharply, an equity market banker who did not want to be named said his colleagues had been given new mandates and an opportunity to promote an initial public offering on Wednesday morning. The message was: “Let’s get the ball rolling,” said the banker.

An investment banker who works at a global firm in New York also said his company had an internal call to discuss deals, including the possible review of some transactions that may trigger regulatory scrutiny from Lina Khan's Federal Trade Commission in the Biden -Government did not pass.

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A more lenient approach to antitrust issues could boost business transactions in many sectors. Two sources with knowledge of the media industry said the sector faces a period of consolidation over the next two years.

Greg Hertrich, head of U.S. custody strategies at Nomura, said there could also be more mergers in the banking industry. “The current number of 4,700 banks in the US could be reduced more quickly to around 2,500,” he said.

Large financial deals have a greater chance of getting the green light. Shares of payments companies Capital One and Discover Financial Services, which are awaiting approval of a $35.3 billion deal, rose sharply.

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