Global Financial Markets Show Resilience Mid-2025 Amid M&A Surge and Lending Growth
Published August 7, 2025 | Updated August 7, 2025
By Rebecca Geldard, Senior Writer, Forum Stories
As we reach the midpoint of 2025, global financial markets are exhibiting notable resilience despite ongoing economic and geopolitical uncertainties. This strength is largely driven by a marked increase in mergers and acquisitions (M&A) activity and a surge in securities lending, highlighting robust investor confidence worldwide.
M&A Boom and Lending Surge Defy Global Headwinds
Global merger and acquisition volumes have soared to a staggering $2.6 trillion in deals year-to-date, marking the busiest period since the peak seen in 2021. Despite a 16% decline in the total number of deals, the overall deal value has risen by 28%, signaling that larger transactions are dominating the market.
The United States continues to dominate global M&A activity, accounting for more than half of all deals, propelled by a rebound in megadeals and a wave of transactions linked to artificial intelligence innovations. Meanwhile, the Asia Pacific region has doubled its deal-making volume, outpacing activity in Europe, the Middle East, and Africa (EMEA), reflecting growing corporate ambitions across the region.
This buoyant M&A environment underscores a sustained appetite among corporations for growth, even as challenges such as inflationary pressures, trade tensions, and regulatory changes persist.
In tandem, global securities lending markets have experienced a 53% year-over-year increase in revenues for July 2025, reaching $1.57 billion, according to the Securities Finance Times. This rise is largely attributed to heightened activity in U.S. and Asian equity markets and points to strong liquidity and an elevated risk tolerance amongst investors.
International financial institutions, including the International Monetary Fund (IMF) and the European Central Bank (ECB), acknowledge ongoing market risks but recognize the solid performance seen in credit markets and non-bank financial intermediaries.
White House Proposes Crackdown on ‘Debanking’ Allegations
In a significant policy development, the White House is preparing an executive order aimed at preventing banks from discriminating against customers based on political affiliations. The move responds to repeated claims from former President Donald Trump and his supporters who allege that major U.S. banks have unfairly closed accounts and denied services—practices they refer to as “debanking.”
The draft executive order would empower federal regulators to utilize existing consumer protection, fair lending, and antitrust laws to investigate and penalize suspected discrimination. However, banking industry representatives maintain that account closures result from risk management practices mandated by law, particularly in combating money laundering, rather than political bias.
Critics caution that introducing political considerations into banking supervision could complicate regulatory processes. Notably, this proposed crackdown contrasts with the current administration’s deregulatory push in the digital assets sector. Recent legislation such as the GENIUS Act aims to establish clear regulatory frameworks for cryptocurrencies while easing supervisory burdens on banks engaging in crypto-related activities without requiring formal pre-approval.
Additional Finance News Highlights
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Accounting Firms and AI Adoption Challenges: Hywel Ball, former UK head of EY, has highlighted that the scale of the “Big Four” accounting firms presents challenges in embracing AI technologies due to difficulties in driving cultural change, giving smaller firms a possible competitive edge.
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European Pharmaceutical Shares Drop: Following President Trump’s reiterated plans to impose tariffs on imported drugs, European pharmaceutical stocks fell to a three-month low, with the STOXX Healthcare index declining 2% on August 6 as investors priced in possible shifts in global drug manufacturing.
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South Korean Market Impacted by Tax Reform: South Korea’s KOSPI index dropped 3.9% amid new tax proposals, dampening investor sentiment despite a $4.5 billion inflow in July. Concerns over reform progress and the enduring “Korea discount” are weighing on Asia’s previously top-performing market.
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UK Director Exodus and Tax Policy Changes: An analysis by the Financial Times shows 3,790 company directors have left the UK following the abolition of favorable tax treatment for non-domiciled residents, up from 2,712 the prior year. The United Arab Emirates is the most popular relocation destination. Meanwhile, UK construction activity contracted sharply in July—the fastest decline since 2020—as housebuilding slows.
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Natural Disasters Drive Insured Losses Surge: Swiss Re estimates that natural disasters triggered $80 billion in insured losses during the first half of 2025, nearly double the ten-year average. California wildfires and U.S. storms are prime contributors, with projections suggesting total annual losses could exceed $150 billion amid the upcoming hurricane season.
Further Insights from the World Economic Forum
Beyond market data, the Forum continues to focus on how financial systems must adapt to global challenges:
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Food Systems and Climate Volatility: Experts Aurora Matteini and Derek Baraldi discuss how financial institutions can support resilient, sustainable food systems to mitigate climate-related inflation and instability.
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Cryptocurrency Regulation Advances: Following the landmark GENIUS Act, the Forum provides analysis of how stablecoin regulation is shaping the U.S. crypto industry landscape.
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Longevity and Retirement Savings Crisis: With the global retirement savings shortfall potentially reaching $400 trillion by 2050, the Forum’s ongoing work explores multi-faceted approaches to secure financial futures in an ageing world.
For more comprehensive coverage and insights, visit the World Economic Forum’s Centre for Financial and Monetary Systems.
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Image credits: REUTERS/Jonathan Drake, Dealogic/Reuters
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