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Extraction Summary
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People
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Organizations
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Locations
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Events
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Relationships
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Quotes
Document Information
Type:
Financial conference presentation slide
File Size:
Summary
This document is a slide from a Bank of America Merrill Lynch financial conference held on November 17, 2016. It discusses the outlook for financial regulation following the 2016 GOP election, analyzes the CCAR stress tests, and presents opinions from panelist Mr. Cohen that regulation is the primary obstacle to bank M&A and activist investor influence. Despite the user's prompt, the document contains no information whatsoever related to Jeffrey Epstein or his associates; its content is strictly focused on the financial services industry.
People (1)
| Name | Role | Context |
|---|---|---|
| Mr. Cohen | Panelist |
A panelist at the 2016 Future of Financials Conference. He noted that the lack of transparency in CCAR stress tests w...
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Organizations (4)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
Host of the '2016 Future of Financials Conference' and creator of the presentation.
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| BofA Merrill Lynch Global Research |
Cited as the source for the charts in the document.
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| GOP (Grand Old Party) |
Mentioned in the context of their 2016 election 'sweep' and its potential impact on regulatory relief for the financi...
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| House Oversight |
Implied by the document identifier 'HOUSE_OVERSIGHT_014373', suggesting this document was part of a collection for a ...
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Timeline (2 events)
Relationships (1)
Mr. Cohen is cited as a panelist at the '2016 Future of Financials Conference' hosted by Bank of America Merrill Lynch.
Key Quotes (3)
"Mr Cohen also noted that a lack of transparency of the test was the least defensible part of CCAR."Source
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Quote #1
"Biggest obstacle for bank M&A and activist influence is regulation."Source
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Quote #2
"he believes a change in attitude of regulators could free up M&A activity."Source
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Quote #3
Full Extracted Text
Complete text extracted from the document (2,392 characters)
Chart 86: Following last week's GOP sweep, do you think regulatory relief is in the cards for the financial services industry?
70%
60%
50%
40%
30%
20%
10%
0%
29%
62%
9%
Yes, and this should have a meaningful impact to returns
Yes, but change in regulatory burden and subsequent impact to bank returns will be more gradual than what financial stocks are currently pricing in
No, I think there will be little change in regulatory burden
Source: BofA Merrill Lynch Global Research
70%
60%
50%
40%
30%
20%
10%
0%
29%
62%
9%
Yes, and this should have a meaningful impact to returns
Yes, but change in regulatory burden and subsequent impact to bank returns will be more gradual than what financial stocks are currently pricing in
No, I think there will be little change in regulatory burden
Source: BofA Merrill Lynch Global Research
CCAR a product of regulatory attitude: The panelists agreed that CCAR in its current form is not a result of legislation as post-recession bank stress tests (SCAP) existed prior to Dodd-Frank. Furthermore, the panelists noted Dodd-Frank's definition of a stress test is very basic, which has been made more stringent and complex as a result of regulators. Mr Cohen also noted that a lack of transparency of the test was the least defensible part of CCAR.
Biggest obstacle for bank M&A and activist influence is regulation. Despite headlines of increased shareholder activism within the banking industry, the majority of investors polled (61%) believe activist investors have only a moderate impact on corporate strategy (see chart). Specifically, Mr. Cohen explained that two of the three reasons why an activist will typically get involved with a corporate are difficult to achieve on a bank's board given the level of regulatory oversight on the industry. While selling the bank is the one area where activists have had success, this typically occurs at the community bank level. That said, he believes a change in attitude of regulators could free up M&A activity.
Chart 87: What kind of impact does an activist investor have in corporate strategy and ultimate shareholder value?
70%
60%
50%
40%
30%
20%
10%
0%
18%
61%
21%
Meaningful impact, as activism behooves complacent Boards to rethink corporate strategy in a way that is most positive to near-term and long-term shareholder value
Moderate impact, as activism can bring issues to the forefront and can invigorate deal discussions but have modest influence in corporate strategy and ultimate shareholder value
No meaningful impact, as many activists have a short-sighted view of shareholder value
Source: BofA Merrill Lynch Global Research
70%
60%
50%
40%
30%
20%
10%
0%
18%
61%
21%
Meaningful impact, as activism behooves complacent Boards to rethink corporate strategy in a way that is most positive to near-term and long-term shareholder value
Moderate impact, as activism can bring issues to the forefront and can invigorate deal discussions but have modest influence in corporate strategy and ultimate shareholder value
No meaningful impact, as many activists have a short-sighted view of shareholder value
Source: BofA Merrill Lynch Global Research
Bank of America
Merrill Lynch
Merrill Lynch
2016 Future of Financials Conference | 17 November 2016 59
HOUSE_OVERSIGHT_014373
HOUSE_OVERSIGHT_014373
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