NEW YORK ( TheStreet) -- Sullivan & Cromwell partner Rodgin Cohen, the keynote speaker at a bank M&A conference hosted by SNL Financial in New York on Wednesday, kicked off the festivities by blasting regulators for stalling a long-anticipated wave of consolidation in the industry. "The regulatory environment has become the most difficult in at least the last 40 years," Cohen announced as he inveighed against "a regulatory conservatism that borders on and sometimes crosses into paralysis." Cohen may be the most prominent bank M&A advisor in the country, and many of the speakers that followed cited his remarks. Among them was Samuel Golden, CEO of Alvarez & Marsal Financial Industry Regulatory Advisory. "From my perspective, a context like this is not acceptable. It's not good for any of us," Golden said, before he turned to James Watkins, an official at the Federal Deposit Insurance Corp., for some "context," in light of Cohen's criticism. Unfortunately Watkins didn't appear to have tossed back any tequila prior to the panel session, or he might have said something like, 'Sam, given the crisis we've had, if you think I or any other regulator is going to stick his neck out even slightly to approve a deal that has even the slightest bit of hair on it, you are living in a dream world.' What Watkins said instead is that bank executives should meet regularly with their regulators and run their plans past them early and often. Golden later conceded that he had done this very thing with a client that was hoping to acquire another institution. Both his client and the institution being acquired went together to meet with the appropriate regulator and received a good indication that the regulator approved of the prospective deal before it went forward. During his remarks, Cohen noted that the days of calling up a regulator and informing him of a deal the night before its announcement were long gone. And well they should be, given what the banking industry, the country, and much of Europe have been through--a result of too many deals done too quickly and with insufficient regulatory supervision.
Now the regulators are saying: Come into my office, run it by me first. I won't be able to give you a total blessing ahead of time but I can let you know what I'm thinking. That sounds like a good thing. Unless you're a bank CEO. Bank CEOs--the ones that didn't get fired--have been walking around for the past five years cursing regulators every chance they get. Why, then, would they want to ask a regulator for permission to do a deal? What do regulators know, anyway? Well CEOs, here's a news flash. Your regulators are scared to death of making the wrong move. Run things by them every chance you get. Regain their trust. Stop complaining. And then you can do your deals. -- Written by Dan Freed in New York. Follow @dan_freed