An unforgiving stock market and declining cash reserves at startups should lead to a wave of U.S. fintech industry consolidation in 2023. Some companies will survive, but many others will throw in the towel or sell their operations at a significant discount to their peak valuations, according to Tom Mason, senior research analyst at S&P Global Market Intelligence. In the episode, Mason discussed the outlook for the banking tech space and what changes to the operating model could mean for independents and traditional banks they're looking to disrupt.

Bank M&A activity fell considerably in 2022 but the push to obtain core deposits should encourage a steady stream of deals in 2023 as funding becomes more precious. In the episode, Bill Burgess, co-head of financial services investment banking at Piper Sandler said he is bullish that roughly 200 transactions could surface in 2023, up nearly 20% from 2022 levels as more and more acquirers seek to bolster their deposit base through M&A, particularly with core deposit premiums at near decade lows.

A spike in interest rates has created large amounts of unrealized losses sitting in banks' bond portfolios and sparked liquidity concerns in the investment community, according to Brett Rabatin, director of research at Hovde Group. In the episode, Rabatin discussed the merits of investors' concerns and the impact that deeply underwater bonds have on banks' liquidity, earnings, valuations and potential regulatory constraints on capital returns.

The slowdown in bank dealmaking in 2022 could reverse course in 2023 as institutions gain greater clarity over emerging liquidity and credit pressures and the regulatory environment, according to some of the most active investment bankers and attorneys focused on deals in bankland. The group, which featured the heads of investment banking from Keefe Bruyette & Woods and Piper Sandler and veteran attorneys from Sullivan & Cromwell, delivered that message during a recent webinar hosted by S&P Global Market Intelligence. The episode features highlights from that discussion, where the advisers said that transactions — either in the form of whole bank acquisitions or capital raises that bolster balance sheets — could pick up next year as banks gain a better understanding of the regulatory environment, liquidity pressures and the potential for notably for higher loan losses. Access the full webinar here: https://pages.marketintelligence.spglobal.com/Bank-M-A-Outlook-When-Will-the-Cool-Front-End-Registration-October-2022.html?utm_source=ON24reg

After explosive growth that outperformed the rest of the industry's historic growth in 2021, Northwestern Mutual believes its long-term approach, digital investments to complement its financial advisor salesforce and focus on diversity and inclusion will allow the company to stand out against other life insurers, wealth managers and the biggest banks. In the episode, Michael Carter, executive vice president, CFO and chief risk officer at Northwestern Mutual, discussed the drivers of the historic growth for the life insurance industry, competition with insurtechs, the impact of higher interest rates on the company's investment portfolio, including its commercial real estate exposures, and its focus on diversity and inclusion.

Higher interest rates promise stronger net interest income for the banking industry, but bank stocks are trading at discounted prices because investors are concerned about potential threats to bank liquidity and credit quality, according to KBW CEO Tom Michaud. In the episode, Michaud discussed current bank stock valuations, the impact of higher rates on deposits, liquidity and credit quality, and how those factors are affecting M&A activity.

The Federal Reserve's aggressive tightening of monetary policy has pushed bank bond portfolios deep into negative territory, altered previously struck bank M&A deals and has given pause to some would-be buyers. In the episode, bankers and advisers from Piper Sandler's depository investment bank team and PNC's Financial Institutions Advisory Group discuss how higher rates have negatively impacted bank deal math, tangible book value and changed the way acquirers communicate with the Street. S&P Global Market Intelligence Banking Reporter Lauren Seay highlights discussions with bankers and advisers as well as earnings call commentary from several seasoned acquirers, including Home BancShares, Seacoast Banking Corp., Community Bank System and Provident Financial.

While deal discussions continue and community banks still see acquisitions as an attractive tool for growth, regulatory headwinds have made M&A a little less attractive for growth-mind companies. In the episode, Jonathan Hightower, partner at Fenimore Kay Harrison LLP, discussed the drivers of community bank M&A activity, the impact of rising rates on transactions, how most community banks already satisfy environmental, social and governance considerations and the changing regulatory landscape for community banks, including the agencies' views of deals.

Large banks' second-quarter results likely helped downplay recessionary fears but many investors will remain on the sidelines until it is clear that a severe recession is not on the horizon, according to Gerard Cassidy. In the episode, Cassidy, managing director and head of U.S. Bank Equity Strategy at RBC Capital Markets, discussed banks' second-quarter results, how institutions' deposit bases are reacting to rate hikes by the Federal Reserve, and what results suggest about the health of the US economy.

The Fed has committed to taming elevated inflation by tightening monetary at a rapid pace, stoking fears that the central bank will not be able to achieve a "soft landing" for the U.S. economy. In the episode, S&P Global Market Intelligence's news team highlights interviews with investors, analysts and economists who say that a recession is a real possibility in 2023 and that small businesses and households with lower incomes, in particular, could feel some pain if that occurred. But the members of the investment community also suggested that large corporates, consumers and banks have strong enough balance sheets to weather a storm — possibly even a "hurricane" — should it emerge.