TCA Financial: Recent data has shown that US buyers and sellers paid $8bn more in fees than the Europeans for comparable transactions over the last 11 years. The data also demonstates that the price gap is widening in favour of Wall Street. Americans paid fees 22 per cent higher than their European counterparts In 2015, highlighting the disparity in mergers and acquisitions and a also a large gap in fees paid for initial public offerings.
According to Colin Phipps, Chief Economist at TCA Financial, “US regulators seem to be taking no action with regard to the pricing gap and antitrust enforcement in the US. It is still sadly insufficient, even following an investigation into possible complicity in the IPO market in the 1990s, which was subsequently withdrawn with no charges ever brought.”
Some investment bankers secretly acknowledge that they are puzzled by the higher fees their banks receive in the US, especially as the cost of running a business in Europe is higher. Some European bankers have remarked on their US rivals, accusing them of exploiting their dominant position. The data shows the top five American banks shared almost 40 per cent of M&A fees last year, while In Europe, the top nine banks shared a mere 15 per cent of the fees.
TCA Financial’s sources, close to many European bankers, say they have admitted that the US market has become far stricter because post-crisis regulations require them to hold more capital there if they want to do business. While US banks have to meet similar commitments, the Europeans argue that it is far easier for them because they can retain excess capital in their domestic market.
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TCA Financial is resolutely committed to helping our clients accumulate and preserve wealth by actively managing the deployment of their investment capital within the global financial markets. We have a proven, checkable track record of being able to accomplish this regardless of the prevailing macro-economic conditions because of our expertise and professionalism and because we know that markets, just like people, are all connected to varying degrees at varying times.