Bank Mergers Heading for Seven-Year High, Pushed by Costly Rules

By Sarah Chaney, Bloomberg News

Here’s an irony: U.S. regulators looking to avoid bailouts of too-big-to-fail banks have passed so many rules that regional and local lenders are combining to stomach the costs.

The result: Banks are bulking up.

Mergers and acquisitions by U.S. banks surged last year to about $18 billion, the highest level since 2009. This year, firms are set to fly past that mark, according to data compiled by Bloomberg.

In nine of the 10 biggest deals completed in 2016, banks selling themselves cited heightened regulatory burdens as a driver, Securities and Exchange Commission filings show. The extension of low interest rates is compounding that pressure ...