Banks will probably stop dropping crazy amounts of cash on blockbuster deals

At a conference this week, Royal Bank of Canada CEO Gordon Nixon explained that banks are simply no longer able to spend absurd amounts of money on one big deal—just absurd amounts of money spread out over lots of smaller deals. According to Nixon: “The ability to do capital-dilutive transactions from a regulatory perspective is just about nonexistent.” Translation: tougher regulations and higher capital standards have made it nigh-impossible to replicate the blockbuster deals that characterized the oughties (for instance, in 2007, TD Bank spent $8.3 billion to buy a New Jersey bank to support its big push into the American market). Now financial institutions must hunt for smaller, strategic acquisitions. Struggling banks in Europe are the likeliest targets—but we’re sure that if the banks have the money, they’ll figure out a way to spend it. [Globe and Mail]