By Milana Vinn, Echo Wang and Nupur Anand

NEW YORK (Reuters)

Wall Street executives are anticipating business-friendly regulations as they assess the implications of a potential second Donald Trump presidency, while some bankers have initiated discussions on potential deals.

Trump’s return to power is expected to alleviate regulatory pressures that have been imposed under the Biden administration, according to executives from banks and private equity firms.

Widely anticipated are smaller government, broad deregulation, and tax breaks for corporations and the wealthy. A milder stance on antitrust issues, coupled with fewer regulations in banking and cryptocurrencies, could potentially enhance corporate profits and stimulate deal flow.

> "He is pro-business and anti-regulation," stated Euan Rellie, co-founder and managing partner of investment bank BDA Partners. "His instincts are to cut taxes. All of that will help the M&A market."

Rellie added, "So long as he governs with moderation and not with chaos, the markets will welcome him." However, some executives tempered their optimism, concerned over unpredictable government policy shifts, trade tariffs, escalating national debt, and tightening visa programs.

Currently, the sentiments are euphoric, as U.S. stocks rallied sharply. An equity capital markets banker mentioned that his colleagues received new mandates and opportunities to pitch for initial public offerings, stating, "let's get the ball rolling."

An investment banker from a global firm in New York noted his firm held a call to discuss reviving deals that might have faced regulatory scrutiny under Lina Khan's Federal Trade Commission during Biden's term.

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A more lenient approach to antitrust issues could catalyze deal-making across various sectors. Two sources from the media industry anticipate a consolidation phase over the next two years.

Greg Hertrich, head of U.S. depository strategies at Nomura, indicated the banking industry might witness more mergers, suggesting the current count of 4,700 banks in the U.S. could drop to about 2,500 quickly.

Significant financial deals might find it easier to gain approval. Shares of payments firms Capital One and Discover Financial Services soared amid anticipation of a $35.3 billion deal.

> "It is expected that the Trump administration will be more open to sensible M&As than many believe has been the case under the Biden administration," remarked Gene Ludwig, a former top bank regulator now advising financial institutions.

For banks, a key question remains how strict the new Basel capital standards will be. Ed Mills, an analyst at Raymond James, highlighted that the change in regulators will stall the regulatory super cycle that has characterized the past few years.

> "We are unlikely to see any major bank regulation come out and all of this paints a very favorable picture for the banks," said Mills.

MANY WORRIES

Not everyone is celebrating. A lawyer working with renewable energy companies reported being in contact with distressed clients seeking assurances from local Republican politicians regarding tax credits and incentives under Biden’s green energy initiatives.

One Wall Street firm's meeting addressed concerns over rising deficits under a Trump administration, with estimates suggesting his policies could add $7.5 trillion to deficits over a decade. Participants expressed hope that Trump’s aides would curb any extremes in tariffs and tax cuts.

Personal concerns also surfaced, particularly regarding the welfare of non-U.S. employees. During his first term, Trump imposed stricter access to certain visa programs, including a suspension of many work visas amid the COVID pandemic.

A private equity investor mentioned discussions centering around international employees on H-1B visas, raising worries about potential difficulties in renewing their visas and how their employers might assist them.