Global Finance Update: Mid-Year Market Resilience, US Banking Crackdown, and Key Industry Developments
Published August 7, 2025 — Updated August 7, 2025
As we pass the midpoint of 2025, global financial markets showcase remarkable resilience despite facing ongoing economic and geopolitical uncertainties. The latest insights from the World Economic Forum’s Centre for Financial and Monetary Systems highlight a robust surge in mergers and acquisitions, a tightening focus on banking discrimination practices in the United States, and a spectrum of other noteworthy finance news shaping the global economic landscape.
1. Mergers & Acquisitions and Securities Lending Signal Market Robustness
Global mergers and acquisitions (M&A) activity has reached an impressive $2.6 trillion year-to-date, marking 2025 as the busiest period since 2021. This represents a 28% increase in deal value compared to last year, even as the total number of deals declined by 16%. The uptrend is largely fuelled by boardroom ambitions, heightened interest in artificial intelligence-related transactions, and a significant rebound in large-scale US deals.
Key highlights include:
- The United States dominates the M&A landscape, accounting for over 50% of global activity.
- Asia Pacific deal-making has doubled, outpacing the Europe, Middle East, and Africa (EMEA) region.
- Elevated valuations and sustained corporate appetite for growth indicate strong investor confidence in navigating persistent economic and geopolitical challenges.
Parallel to the M&A boom, global securities lending revenues saw a 53% year-over-year increase in July, reaching $1.57 billion. This surge is primarily driven by heightened activity in US and Asian equity markets. The increase in lending volumes points to robust trading activity and ample liquidity, reflecting a notable risk appetite among investors despite prevailing market volatility caused by trade tensions, inflationary pressures, and evolving regulatory environments.
These market trends are consistent with recent evaluations by the International Monetary Fund (IMF) and the European Central Bank (ECB), which acknowledge ongoing financial volatility and geopolitical risks but also recognize the strong performance of credit markets and growing influence of non-bank financial intermediaries.
2. US Banking Sector Faces Potential "Debanking" Crackdown
In response to allegations of political discrimination by major US banks, the White House is drafting an executive order aimed at empowering federal regulators to investigate and penalize banks accused of unfairly closing accounts or denying services based on clients’ political affiliations. Reuters reports that this initiative follows repeated claims by former President Donald Trump and his supporters about “debanking” practices targeting them.
The draft order would instruct regulatory agencies to leverage existing consumer protection, fair lending, and antitrust laws to address these concerns. However, banking industry representatives emphasize that account closures generally result from mandatory risk-management protocols related to compliance, including anti-money laundering measures, rather than political biases.
Critics of the proposed crackdown warn that introducing political considerations into banking supervision could complicate regulation. Interestingly, this move contrasts with a broader deregulatory trend in digital assets where the US government seeks to foster innovation. For instance, the recent enactment of the GENIUS Act—the first major US cryptocurrency legislation—aims to establish clearer regulatory guidelines for stablecoins. Additionally, federal banking agencies have relaxed supervisory rules to support banks engaging in crypto-related activities without requiring formal pre-approval.
3. Additional Notable Finance Developments
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Challenges for Big Four Accounting Firms Adopting AI: Hywel Ball, former UK head of EY, pointed out in the Financial Times that the sheer size of the Big Four accounting firms may hinder swift cultural adaptation necessary for AI integration, giving smaller firms a competitive edge in agility.
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European Pharma Shares Decline: On August 6, European pharmaceutical stocks fell to a three-month low following renewed threats by President Trump to impose tariffs on imported drugs. The STOXX Healthcare index dropped by 2% as investors reacted to his push for US-based production.
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South Korea’s Market Wobbles Amid Tax Reform: Despite a $4.5 billion inflow in July making South Korea’s KOSPI one of Asia’s top-performing markets, new tax proposals have sparked a 3.9% decline, casting doubt on reform momentum and fueling concerns over the so-called “Korea discount.”
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UK Director Exodus Following Tax Policy Changes: Analysis by the Financial Times reveals that 3,790 company directors have resigned from their positions in the UK since abolishing favorable tax treatment for non-domiciled residents—a notable increase from 2,712 in the previous year. The United Arab Emirates has emerged as the preferred destination for many expatriates.
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UK Construction Activity Contracts: The UK construction sector experienced its steepest downturn since 2020 in July, with the S&P Global Purchasing Managers’ Index (PMI) falling to 44.3, indicating a marked contraction and an ongoing slowdown in housebuilding.
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Rising Costs from Natural Disasters: Swiss Re reports that insured losses from natural disasters hit $80 billion in the first half of 2025—nearly double the decade average—with Californian wildfires and US storms driving much of the financial impact. Losses are projected to exceed $150 billion for the full year as the hurricane season progresses.
4. Further Reading and Insights from the World Economic Forum
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Transforming Food Systems Amid Climate Shocks: Experts Aurora Matteini and Derek Baraldi discuss how sustainable finance can bolster the agricultural sector to enhance resilience, cut emissions, and protect livelihoods. Their work draws from the Forum’s Playbook of Financing Solutions for Food Systems Transformation.
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Implications of the GENIUS Act on Crypto Regulation: Sandra Waliczek and Harry Yeung analyze the recently passed US legislation that sets regulatory standards for stablecoins and charts a course for digital currency oversight in the United States.
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Addressing the Global Retirement Savings Gap: In a recent Meet the Leader podcast episode, Yie-Hsin Hung, CEO of State Street Investment Management, outlines the drivers behind a looming $400 trillion global retirement savings shortfall and advocates for comprehensive, collaborative solutions. More on this topic can be found through the Centre for Financial and Monetary Systems’ Longevity Economy initiative.
For ongoing updates and deeper analysis of the financial world’s evolving dynamics, subscribe to the World Economic Forum’s Forum Stories newsletter or explore more on the Centre for Financial and Monetary Systems webpage.
The views expressed herein are those of the author and do not necessarily reflect those of the World Economic Forum.
License: This article is available for republication under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License.
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Image credits: REUTERS/Jonathan Drake (File Photo)