Global Financial Markets Show Resilience at Mid-Year with Strong M&A Activity and Lending Surge
August 7, 2025 — Rebecca Geldard, Senior Writer, Forum Stories
As we reach the halfway point of 2025, financial markets worldwide are demonstrating notable resilience despite ongoing economic and geopolitical challenges. A combination of booming mergers and acquisitions (M&A) activity and increased securities lending revenues reflect sustained investor confidence amid persistent uncertainty, according to recent data reported by the World Economic Forum’s Centre for Financial and Monetary Systems.
1. M&A Boom and Lending Surge Signal Market Strength
Global mergers and acquisitions have reached a remarkable $2.6 trillion year-to-date, marking the busiest period since 2021. This surge is primarily driven by renewed boardroom ambitions, a sharp rise in AI-related transactions, and the rebounding of large-scale U.S. deals. Noteworthy highlights include:
- Overall deal value has increased by 28% compared to last year, despite a 16% decline in the total number of deals.
- The United States remains the dominant market, accounting for over half of the global M&A activity.
- The Asia Pacific region recorded a doubling in deal-making activity, outpacing the Europe, Middle East, and Africa (EMEA) markets.
These trends underscore elevated asset valuations and a persistent corporate appetite for growth, reinforcing a broad-based confidence among investors to navigate ongoing financial volatility and geopolitical complexities.
Parallel to the M&A upswing, global securities lending revenues surged 53% year-over-year in July, reaching $1.57 billion. The Securities Finance Times attributes this increase to heightened activity in the U.S. and Asian equity markets, indicating robust trading volumes and ample liquidity. This uptrend also points to a significant risk tolerance among investors, despite headwinds such as trade tensions, inflation worries, and evolving regulatory landscapes.
These developments align with recent assessments from leading financial institutions like the International Monetary Fund (IMF) and the European Central Bank (ECB), both of which acknowledge persistent risks but highlight the strong performance of credit markets and non-bank financial intermediaries.
2. U.S. Banks Face Potential ‘Debanking’ Crackdown
In a significant regulatory development, the White House is reportedly preparing an executive order aimed at empowering federal regulators to investigate and penalize banks accused of discriminating against clients based on political affiliations. The draft order follows claims by former President Donald Trump and his supporters that major banks have engaged in so-called "debanking" — closing accounts and denying services over political reasons.
If enacted, the order would direct agencies to leverage existing authority under consumer protection, fair lending, and antitrust laws to address these allegations. The banking industry, however, maintains that account closures usually stem from mandatory risk management practices designed to combat money laundering and other illegal activities, rather than political bias.
Critics within the financial sector warn this regulatory push might politicize banking supervision. Interestingly, this potential crackdown contrasts with the broader deregulatory trend in areas such as digital assets, where the current administration aims to position the U.S. as the "crypto capital of the world." For instance, the recent passage of the GENIUS Act—the first major crypto legislation —alongside eased supervisory rules for crypto-related banking activities, exemplifies this innovation-supportive approach.
3. Additional Finance News Highlights
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Accounting Industry Faces AI Integration Challenges: Hywel Ball, former UK head of EY, highlighted to the Financial Times that the “Big Four” accounting firms encounter significant obstacles adopting AI technologies due to their large size and cultural inertia, an advantage that smaller firms may leverage.
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European Pharma Shares Fall Due to Tariff Threats: The STOXX Healthcare index dropped 2% on August 6, following renewed announcements by Donald Trump to impose tariffs on imported pharmaceuticals, reflecting investor concerns over production shifting to the U.S.
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South Korea’s Market Impacted by Tax Reforms: South Korea’s benchmark index, the KOSPI, declined by 3.9%, dampening its status as Asia’s top-performing market this year. Despite substantial inflows, investor confidence has been shaken amid ongoing reform debates and the lingering “Korea discount.”
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Exodus of UK Company Directors Amid Tax Changes: Analysis reveals that 3,790 company directors have left the UK since the government ended tax benefits for non-domiciled residents, up from 2,712 the previous year. The United Arab Emirates has emerged as the favored destination for those moving abroad.
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UK Construction Activity Sees Sharpest Decline Since 2020: July’s S&P Global Purchasing Managers’ Index (PMI) for construction fell to 44.3, indicating contraction driven by a slowdown in housebuilding.
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Rising Natural Disaster Losses: Insurance losses triggered by natural disasters have reached $80 billion in the first half of 2025—nearly double the 10-year average—with wildfires in California and storms in the U.S. leading the surge. Swiss Re projects overall losses could exceed $150 billion this year as the hurricane season progresses.
4. Further Reading and Insights from the World Economic Forum
The World Economic Forum continues to provide in-depth analysis on the intersection of finance with broader global trends:
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Transforming Food Systems: Sustainable finance experts Aurora Matteini and Derek Baraldi discuss how financial markets can help build resilient, low-emission food systems amidst growing climate and market volatility.
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Crypto Regulation’s Future: Sandra Waliczek and Harry Yeung analyze the implications of the GENIUS Act, focusing on stablecoin regulation and its impact on the digital currency sector.
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Tackling the Retirement Savings Gap: Yie-Hsin Hung, CEO of State Street Investment Management, outlines the challenges and necessary multi-faceted strategies to address the looming $400 trillion global retirement savings shortfall by 2050. For more stories and comprehensive coverage on financial and monetary systems, visit the World Economic Forum’s Centre for Financial and Monetary Systems.
This article is published under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License. Views expressed are solely those of the author and do not necessarily reflect the World Economic Forum’s positions.