Mergers and acquisitions advisory teams at leading investment banks are experiencing jumps of as much as 30 per cent in their deal pipelines, even as revenues from completed transactions remain depressed.

The assessment reflects a growing sense among bankers on Wall Street and in the City of London that the US economic recovery and higher equity valuations are prompting previously risk-averse chief executives to contemplate strategic moves.

Evidence of a pick-up in activity comes at the end of a year in which overall announced deal volumes were only 6.7 per cent higher than in 2002 - the weakest year for M&A since 1996.

Mr Steve Baronoff, global head of M&A at Merrill Lynch, said: "It is pretty clear that we have passed the bottom: the markets, the dialogue and the pipeline are improving."

But as some top Wall St banks reported quarterly earnings this month, Morgan Stanley stood out with a 30 per cent increase in its M&A pipeline compared with the same time last year.

Similar increases are occurring at most institutions.