Global Financial Markets Show Resilience as Mid-Year Marks M&A Surge and Lending Growth
By Rebecca Geldard, Senior Writer, Forum Stories
Published August 7, 2025 | Updated August 7, 2025
As we reach the midpoint of 2025, the global financial landscape reveals remarkable resilience against persistent economic and geopolitical uncertainties. A surge in mergers and acquisitions (M&A) activity coupled with a sharp increase in securities lending signals sustained investor confidence and robust market dynamics.
1. M&A Boom and Lending Surge Signal Resilient Markets
Global mergers and acquisitions have soared to a staggering $2.6 trillion year-to-date, marking the busiest period since 2021. According to Reuters and Dealogic data, M&A deal value has increased by 28%, despite a 16% decrease in the total number of deals. This trend highlights elevated valuations and corporations’ strong appetite for growth.
The United States continues to lead the global M&A market, accounting for over half of all activity. The Asia-Pacific region has also demonstrated remarkable momentum — doubling its deal-making volume and outpacing Europe, the Middle East, and Africa (EMEA).
Driving this surge are strategic boardroom ambitions, particularly a spike in artificial intelligence-related transactions, and a notable rebound in large-scale US megadeals. Investors appear undeterred by ongoing challenges such as inflationary pressures, trade tensions, and shifting regulatory landscapes.
In parallel, global securities lending revenues experienced a 53% year-over-year increase in July, reaching $1.57 billion. The Securities Finance Times attributes this growth primarily to heightened activity in US and Asian equity markets, indicating healthy trading volumes and ample liquidity. The surge in lending revenues also reflects a significant risk appetite among market participants in the face of increased volatility.
These positive market signals align with recent analyses from the International Monetary Fund (IMF) and European Central Bank (ECB), both of which acknowledge ongoing financial risks but also recognize the strong performance of key credit markets and non-bank financial intermediaries.
2. US Banks Face Potential Crackdown Over Political ‘Debanking’
In a developing policy initiative, the White House is preparing an executive order aimed at empowering federal regulators to investigate and penalize banks that discriminate against clients based on political affiliations. Reuters reports that the draft order is a response to claims, mainly from former President Donald Trump and his supporters, alleging that some major US banks have unfairly closed accounts and denied services—a practice termed "debanking."
The executive order would direct regulatory agencies to apply existing consumer protection, fair lending, and antitrust laws to address these allegations. However, the banking sector has denied politically motivated actions, maintaining that decisions to close accounts are guided by legal risk-management requirements, such as anti-money laundering protocols.
Critics caution that politicizing banking supervision could introduce complications, warning that the move runs counter to the administration’s broader deregulatory trend, especially in the digital assets space. Just last month, the signing of the GENIUS Act—the first major crypto legislation passed by Congress—signaled the government’s intent to position the United States as a global leader in cryptocurrency innovation. This includes easing banking supervisory rules to foster crypto-related activities without formal pre-approval.
3. More Finance News to Know
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Accounting Industry and AI Adoption Challenges: Hywel Ball, former UK head of EY, spoke to the Financial Times highlighting that the "Big Four" accounting firms face significant hurdles in adopting artificial intelligence due to their vast size. This scale can hamper organizational cultural change, giving smaller, more agile firms a competitive edge in AI integration.
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European Pharma Shares Dip Amid Tariff Threats: Following renewed tariff threats from Donald Trump on imported pharmaceuticals, European drug shares dropped to a three-month low. The STOXX Healthcare index declined by 2% on August 6 as investors responded to calls for companies to relocate production to the US.
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South Korean Market Cools Amid Tax Reform Concerns: South Korea’s KOSPI Index fell 3.9%, interrupting what had been Asia’s top-performing market rally. Despite $4.5 billion in inflows during July, investors are concerned about the pace of reform and persistent “Korea discount” challenges.
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Director Exodus Following UK Tax Changes: Analysis by the Financial Times of Companies House records reveals that 3,790 company directors have exited the UK since the government abolished favorable tax treatment for non-domiciled residents—a rise from 2,712 the prior year. The United Arab Emirates ranks as the leading destination for these departing directors.
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UK Construction Contracts Its Sharpest Since 2020: The UK construction sector saw a marked decline in activity in July, with S&P Global’s Purchasing Managers’ Index (PMI) dropping to 44.3, signaling contraction. This decline is attributed largely to a slowdown in housebuilding amid broader economic headwinds.
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Natural Disasters Fuel Surge in Insured Losses: Swiss Re reports that natural disasters caused $80 billion in insured losses in the first half of 2025, nearly double the 10-year average. Wildfires in California and severe storms in the US are key contributors, with total losses for the year potentially exceeding $150 billion as hurricane season intensifies.
4. Insightful Reads from Forum Stories
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Finance and Food Systems Transformation: Sustainable finance experts Aurora Matteini and Derek Baraldi explore how the financial sector can help address climate-driven agricultural volatility that exacerbates inflation. They call for urgent action to transform food systems, drawing on the World Economic Forum’s Playbook of Financing Solutions for Food Systems Transformation.
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Understanding the GENIUS Act and Crypto Regulation: Following the landmark crypto legislation in the US, Forum experts Sandra Waliczek and Harry Yeung detail how the GENIUS Act regulates stablecoins and will shape the future of the digital asset industry.
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Tackling the Global Retirement Savings Gap: Yie-Hsin Hung, CEO of State Street Investment Management, outlines in the Forum’s Meet the Leader podcast the drivers behind the looming $400 trillion retirement savings shortfall and the urgent need for multi-faceted solutions informed by the Longevity Economy initiative.
For more on these stories and the World Economic Forum’s ongoing work in financial innovation and stability, visit the Centre for Financial and Monetary Systems.
This article is available under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License.
The views expressed are those of the author alone and not necessarily those of the World Economic Forum.
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