Joe Mantone

A proposed overhaul of the CAMELS rating system could be a tailwind for bank M&A by enabling institutions to secure better ratings under less stringent management criteria. On May 19, the interagency Federal Financial Institutions Examination Council released a long-awaited proposal to revise the CAMELS rating system, which measures an institution's capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk on a scale of 1 to 5, with 5 being the worst.

Market volatility that first started with concerns stemming from private credit and then spread to fallout related to the Iran war has clouded the outlook for dealmaking. During the first quarter, VIX, the Cboe index that measures expected volatility in the S&P 500, recorded an average close of 20.5, up from 17.8 in the prior quarter and 18.6 in the year ago.

Larger transactions drove the dealmaking recovery in 2025, with the trend especially evident in the fourth quarter. During the period, the number of completed global equity transactions and M&A announcements fell quarter over quarter, while the total value of those deals increased from the third quarter of 2025. Although the recovery has been uneven, larger deals helped the total value of transactions in 2025 grow year over year for the second straight year.