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This Week in Finance: M&A Surge, ‘Debanking’ Controversy, and Global Market Insights

January 17, 2026
Smart Money
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Global Financial Markets Show Resilience at Mid-Year Amid M&A Boom and Lending Surge

Published: August 7, 2025 | Updated: August 7, 2025

By Rebecca Geldard, Senior Writer, Forum Stories

As the financial year reaches its midpoint, global markets are demonstrating robust resilience despite ongoing economic and geopolitical uncertainties. Key developments highlight a strong surge in mergers and acquisitions (M&A) activity and a notable increase in securities lending revenues, signaling sustained investor confidence worldwide.

M&A Activity Reaches Highest Levels Since 2021

According to the latest data compiled by Reuters and Dealogic, global M&A transactions have surged to a total value of $2.6 trillion year-to-date—an increase of 28% compared to the same period last year—even as the total number of deals declined by 16%. The market’s momentum is fuelled by a combination of factors, including aggressive boardroom ambitions, a wave of AI-related mergers, and a strong rebound in large-scale transactions within the United States.

The U.S. remains the largest arena for dealmaking, accounting for over half of global M&A activities. Meanwhile, Asia Pacific has doubled its deal volume, outpacing the Europe, Middle East, and Africa (EMEA) region, reflecting dynamic growth and increasing corporate appetite in these markets. Elevated valuations and a hunger for expansion underscore a prevailing optimism among investors navigating a complex economic landscape marked by inflation concerns and geopolitical tensions.

Surge in Securities Lending Points to Robust Market Liquidity

Parallel to the M&A boom, global securities lending revenues saw a remarkable 53% year-over-year rise in July, amounting to $1.57 billion, as reported by Securities Finance Times. This surge is mainly attributed to increased activity in U.S. and Asian equity markets, indicating healthy trading volumes and plentiful liquidity. The heightened lending activity also reflects a growing risk tolerance among investors, despite ongoing volatility driven by trade disputes and regulatory changes.

Such trends align with assessments from prominent financial institutions including the International Monetary Fund (IMF) and the European Central Bank (ECB), which both acknowledge persistent risks while highlighting strength in key credit markets and non-bank financial intermediaries.

U.S. Government Moves to Address Political "Debanking" Concerns

In a significant policy development, the White House is preparing an executive order aimed at curbing what has been termed “debanking” — the alleged practice of some banks closing accounts based on clients’ political affiliations. According to Reuters, this directive would empower federal regulators to investigate and penalize banks engaging in such discriminatory practices, utilizing powers under consumer protection, fair lending, and antitrust laws.

These measures come in response to repeated claims by former President Donald Trump and his supporters, who assert that major U.S. banks have unfairly restricted their financial services. However, banking industry representatives contend that account closures are driven by mandatory risk-management protocols designed to combat money laundering and financial crimes, rather than political bias.

Critics warn that the new policy could politicize banking supervision, diverging from the broader regulatory easing observed in other areas, notably digital assets. The administration continues to champion innovation in the cryptocurrency space, highlighted by recent legislation such as the GENIUS Act—the first major crypto bill passed by Congress—which aims to establish clear regulatory frameworks for stablecoins and other digital currencies.

Additional Finance Highlights: Challenges and Market Movements

  • Big Four Accounting Firms and AI Adoption: Hywel Ball, former UK head of EY, highlighted the "significant challenges" faced by major accounting firms in integrating artificial intelligence, citing their large scale as a barrier to cultural change and technological agility. Smaller firms appear better positioned to capitalize on AI advancements.

  • European Pharmaceuticals Impacted by Tariff Threats: The STOXX Healthcare index fell 2% after President Trump reiterated intentions to impose tariffs on imported drugs, spooking investors and pressuring pharmaceutical shares to a three-month low.

  • South Korean Market Dents on Tax Reform Concerns: South Korea’s KOSPI index dropped 3.9% amid investor worries regarding tax reform momentum, even after attracting $4.5 billion in inflows during July.

  • UK Corporate Director Exodus: Following the abolition of favorable tax treatment for non-domiciled residents, 3,790 company directors have left the UK—a notable increase from 2,712 a year earlier. The United Arab Emirates remains the preferred destination.

  • UK Construction Activity Contracts: July saw the sharpest decline in UK construction since 2020, with S&P Global’s Purchasing Managers’ Index (PMI) falling to 44.3, indicating a sustained slowdown in housebuilding efforts.

  • Escalating 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—primarily due to wildfires in California and severe storms in the U.S. With hurricane season underway, total losses could surpass $150 billion by year-end.

Exploring Broader Financial Themes

The World Economic Forum continues to spotlight critical financial topics, including the intersection of climate shocks and food system volatility, underscoring the finance sector’s essential role in fostering sustainable agriculture. In addition, insights into the GENIUS Act delineate new regulatory horizons for cryptocurrency in the United States. Moreover, looming concerns over the global retirement savings gap—potentially reaching $400 trillion by 2050—are discussed in depth through the Forum’s initiatives and podcast series, emphasizing the need for multifaceted solutions to longevity-related economic challenges.

For more information on the World Economic Forum’s finance-related projects and analyses, visit the Centre for Financial and Monetary Systems.

This article is published under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License. The views expressed herein do not necessarily reflect those of the World Economic Forum.

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