Impending financial regulations are rumbling though the banking quarters like thunder through a skyscraper’s walls. It’s unsettling to some.

Today Christopher Dodd, the Democratic chairman of the Senate Banking Committee, said he has reached an impasse with his Republican counterpart and will begin drafting new legislation to be considered later this month.

Congress is trying to construct an overhaul of financial regulations in the wake of the market meltdown that led to multi-billion dollar taxpayer bailouts of individual financial firms and the collapse of others, including Lehman Brothers.

Proposals include creating a consumer agency to police financial products, forming a systemic risk regulator and drafting stricter capital and liquidity requirements for financial firms.

Some background from the Web:

• Federal Reserve Board Governor Kevin Warsh’s opinion piece in the FT: Focus on ways for banks to fail safely
• Bank reform faces hurdle on Volcker rule (Reuters)
• The Volcker rule’s loopholes (Reuters)
• The regulatory landscape for private equity (NYT)
• Obama bid to rein in banks meets Senate resistance (Reuters)
• Banks read tea leaves in ‘Volcker rule’ fight (Bank Investment Consultant)
• Volcker and reform defeated (WSJ)

In a sign of the times, Air Products and Chemicals has become the latest suitor that does not want to hear ‘no’ for an answer.

The company launched an unsolicited $5.1-billion cash bid to buy rival Airgas in a move to create the largest industrial gas company in North America. In the past four months, Air Products had made two written offers but they were rejected by the Airgas board.

Unsolicited approaches and hostile M&A tend to increase coming out of a recession. As the economy begins to stabilize, stronger players feeling more secure in their own future seize on the chance to buy rivals at still-depressed prices. In the past few months, such deals include Kraft’s bid for Cadbury and the battle involving Agrium, CF and Terra.

Air Products said it offered a 38 percent premium over Airgas’s closing price Thursday and an 18 percent over Airgas’s 52-week high. But the $60 per share offer is around the low $60s Airgas touched in June of 2008.

Fond memories of a company’s past glory and expectations about profitability are often reasons why boards are so reluctant to sell out in their new, more depressing realities, and why these unsolicited approaches tend to turn hostile.

Airgas, which has a sales and distribution network that sells canisters of specialty gases to industrial and medical facilities, also seems to be using the classic defence against unsolicited bids — appealing to its shareholders with its history as a higher return, faster growing company.

Airgas stock price appreciated 80 percent over the last five years and 415 percent over the last 10 years, compared to just 40 percent and 145 percent for Air Products` shares over the same periods, it pointed out in a letter its board sent to Air Products after the last approach.

It said it would review the latest proposal and advised shareholders to not take any action.

HSBC analyst Johannes Thormann suggests an elegant way for Raiffeisen International, the Vienna-based No.2 bank in emerging Europe, to sell new shares this year. While the bank is relatively well capitalised for the time being, with core Tier 1 at 8.7 percent at the end of Q3, this was only thanks to a 1.25 billion euro injection from its unlisted 70-percent parent RZB, which passed on some of the Austrian government capital it received itself last year.

It was a shareholder-friendly idea of RZB to inject 600 million euros of this capital by way of non-voting “participation rights” which didn’t dilute shareholders at a time when the share price was battered because of lingering concerns eastern Europe was facing a financial meltdown. (The remaining 650 million euros are a straight Tier 1 hybrid.) But the flip side was that those participation rights carry a steep 10 percent coupon that goes out after the net profit line, i.e. is after taxes.

In a research note initiating his coverage of Raiffeisen, Thormann says that using a 10-percent share issue (which, as it happens, works out as roughly 600 million euros at current prices) to repay the participation rights would therefore actually increase earnings per share:

“We have not factored in any capital increase but could easily imagine a 10% capital increase in 2010 in which Raiffeisen International would use the proceeds not to boost its Tier 1 ratio but to pay back the EUR600m Genussrechte (participation rights). This move, which would also effectively strengthen the capital position of RZB Group, would not imply a 10% EPS dilution. Rather it would be 10% EPS accretive in 2010e and just 1% EPS dilutive in 2011e as the 10% after-tax coupon on the EUR600m Genussrechte would fall away.”