While bull markets and easy financing are critical for strong M&A, another important factor is government action. For example, the Telecommunications Reform Act of 1996 led to a surge in M&A activity, as the government allowed competition in local and long-distance communications. This is why President Obama's recent statement on finance reform is so important, especially to the private equity and hedge fund sectors. He declared: "No bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund." Symbolically, Obama gave his speech during Goldman Sachs' ( GS ) earnings call, where the company reported profits of $4.79 billion. The main growth driver was from its trading and principal investment activities (which amounted to $6.41 billion in revenues). It's these kinds of activities that Obama considers too risky for federally-supported financial institutions. Continue reading Obama's Bank Bashing May Ignite M&A Obama's Bank Bashing May Ignite M&A originally appeared on DailyFinance on Sat, 23 Jan 2010 17:50:00. Filed Under: Company News , Economy , JP Morgan Chase , Goldman Sachs Permalink | Tweet this! | Comments