M&A bankers may have good reason to be bearish on the prospects for dealmaking in the final three months of the year, as sovereign debt concerns take their toll, but one bright spot for the market is cross-border activity.

While sovereign debt concerns continue to suppress global activity, with total domestic M&A down from 900 deals in the first nine months of 2010 to 853 deals in same period this year, the volume of cross-border M&A has increased, according to the latest Allen & Overy M&A Index