Global Financial Markets Show Resilience at Mid-Year, M&A Activity Surges; White House Targets Political “Debanking”
August 7, 2025 — As the financial world reaches the midpoint of 2025, a series of notable developments are shaping global markets and regulatory landscapes. According to the World Economic Forum’s latest finance briefing, global markets have exhibited remarkable resilience with a booming mergers and acquisitions (M&A) sector and surging securities lending revenues. Meanwhile, US regulators prepare to combat alleged politically motivated account closures, and other significant financial updates highlight evolving challenges and trends worldwide.
1. M&A Activity and Lending Surge Signal Strong Market Confidence
Despite ongoing geopolitical tensions and economic uncertainties, global financial markets have maintained robust momentum. This resilience is most evident in the M&A space, which has hit a record $2.6 trillion in deals year-to-date—the highest level since 2021. Key highlights from the M&A landscape include:
- Deal Value Growth: A 28% increase in total deal value compared to last year, despite a 16% decline in the number of deals.
- Regional Drivers: The US continues to dominate, accounting for over half of global M&A activity. The Asia-Pacific region’s deal-making volume has doubled, outpacing Europe, the Middle East, and Africa (EMEA).
- Sector Trends: A notable surge in AI-related deals, reflecting the technology’s growing strategic importance.
This strong M&A performance underscores companies’ persistent appetite for growth and elevated asset valuations, signaling sustained investor confidence amid uncertain macroeconomic conditions.
Parallel to dealmaking, global securities lending revenues also recorded a significant increase. July’s revenues hit $1.57 billion, up 53% from the previous year. The uptick was primarily driven by vigorous activity in US and Asian equity markets, suggesting robust trading volumes and ample liquidity availability.
International financial institutions are taking note. Both the International Monetary Fund (IMF) and the European Central Bank (ECB) acknowledge ongoing financial volatility but emphasize the continued strength of credit markets and non-bank financial intermediaries as buffers against shocks.
2. White House Moves to Address Alleged Political ‘Debanking’
On the regulatory front, the White House is preparing an executive order aimed at curbing discriminatory banking practices based on political beliefs. The proposed directive would empower federal regulators to investigate and penalize banks that close accounts or deny services due to clients’ political affiliations—a practice termed “debanking,” particularly by former President Donald Trump and his supporters.
The draft order seeks to leverage existing consumer protection, fair lending, and antitrust laws to root out any politically motivated financial exclusions. However, the banking industry strongly denies these allegations, emphasizing that account closures are typically driven by mandatory risk management protocols such as anti-money laundering regulations, not political considerations.
Critics warn that this move could introduce political bias into banking oversight at a time when broader deregulation efforts — especially in digital assets — are underway. Indeed, the administration aims to position the US as a global leader in cryptocurrency innovation, highlighted by:
- The recent signing of the GENIUS Act, the first major US legislation providing regulatory clarity for stablecoins, a form of digital currency.
- Regulatory easing by federal agencies, including removing the requirement for banks to obtain formal pre-approval for certain crypto-related activities.
3. Additional Finance News Roundup
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Accounting Firms and AI Adoption: Hywel Ball, former UK head of EY, cautions that the largest accounting firms face significant cultural and scale-related barriers to implementing AI effectively, potentially giving smaller, more agile firms an edge.
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European Pharmaceutical Stocks Fall: Amid renewed tariffs on imported drugs proposed by Trump, European pharmaceutical shares dropped 2% on August 6, hitting a three-month low.
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South Korea’s Market Dips: KOSPI declined 3.9% following new tax reform proposals, raising investor concerns despite recent inflows and the market’s prior strong performance.
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UK Corporate Director Exodus: Following the UK government’s abolition of favourable tax treatment for non-domiciled residents, 3,790 company directors have exited the UK—a sharp increase from the previous year—with the United Arab Emirates emerging as a favored relocation destination.
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UK Construction Slowdown: The sector experienced its sharpest contraction since 2020 in July, with S&P Global’s Purchasing Managers’ Index (PMI) falling to 44.3, signaling a significant slowdown in housebuilding.
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Rising Natural Disaster Costs: Swiss Re estimates insured losses from natural disasters reached $80 billion in the first half of 2025—nearly double the 10-year average—driven by wildfires in California and severe US storms, with potential total losses exceeding $150 billion as hurricane season approaches.
4. Further Insights from the World Economic Forum
The Forum continues to shed light on critical financial themes, including:
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Climate and Food Systems Finance: Experts Aurora Matteini and Derek Baraldi explore the role of sustainable finance in enhancing agricultural resilience, reducing emissions, and supporting livelihoods amid intensifying climate shocks and inflationary pressures.
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Crypto Legislation Impact: Analysts Sandra Waliczek and Harry Yeung dissect how the GENIUS Act’s stablecoin regulations will shape the US digital currency landscape.
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Retirement Savings Crisis: Yie-Hsin Hung, CEO of State Street Investment Management, discusses the looming $400 trillion global retirement savings gap and the need for collaborative, multi-faceted solutions in the Forum’s “Meet the Leader” podcast.
For ongoing coverage and to learn more about the World Economic Forum’s initiatives in finance, including the Centre for Financial and Monetary Systems, interested readers are encouraged to subscribe to the Forum’s newsletters and visit their website.
About the World Economic Forum:
The World Economic Forum is an international organization committed to improving the state of the world through public-private cooperation. It engages political, business, and academic leaders to shape global, regional, and industry agendas.
Image Credit: REUTERS/Jonathan Drake/File Photo