Global Financial Markets Show Resilience with Surge in M&A and Lending Activity: Key Finance Developments from the World Economic Forum
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 remarkable resilience despite ongoing economic and geopolitical uncertainties. Leading indicators such as a surge in mergers and acquisitions (M&A) and a significant rise in securities lending revenues underscore robust investor confidence. Additionally, evolving regulatory landscapes and tax policy shifts continue to impact markets worldwide.
Here is a comprehensive overview of this week’s essential finance news curated by the World Economic Forum’s Centre for Financial and Monetary Systems.
1. M&A Boom and Lending Surge Signal Market Confidence
Global mergers and acquisitions activity has soared to a peak $2.6 trillion year-to-date, marking the most active period since 2021. This robust figure represents a 28% increase in deal value compared to the same period last year, despite a 16% decline in the number of deals completed. The upswing is largely driven by ambitious corporate boardroom strategies, a wave of deals linked to artificial intelligence (AI) technologies, and a revival of large-scale transactions in the United States.
Some notable highlights include:
- The US remains the dominant M&A market, accounting for over half of all global deal activity.
- The Asia Pacific region has more than doubled its deal-making volume, outpacing Europe, the Middle East, and Africa (EMEA).
- Elevated asset valuations and a strong appetite for corporate expansion underpin continued investor confidence amidst a backdrop of inflation concerns, trade frictions, and geopolitical tensions.
Source: Dealogic/Reuters
Parallel to the boom in M&A, global securities lending revenues experienced a year-over-year jump of 53% in July, reaching $1.57 billion. This surge is primarily fueled by vibrant equity markets in the US and Asia, reflecting heightened trading volumes and ample market liquidity. The growing popularity of securities lending also hints at increased risk tolerance among investors, even as regulatory uncertainties and inflationary pressures persist.
These developments align with assessments by bodies such as the International Monetary Fund (IMF) and the European Central Bank (ECB), which acknowledge persistent risks but also recognize the steady performance of key credit markets and the resilience of non-bank financial intermediaries.
2. White House Prepares ‘Debanking’ Crackdown Amid Political Allegations
Amid claims from former President Donald Trump and his supporters that major US banks have discriminated against clients based on political affiliations—a practice they call "debanking"—the White House is drafting an executive order intended to empower federal regulators to probe and penalize such actions.
According to Reuters, the order would instruct agencies to leverage existing consumer protection, fair lending, and antitrust laws to investigate these claims. While the banking industry rejects accusations of political bias, citing compliance with legal risk-management measures such as anti-money laundering regulations, this potential crackdown could introduce a new dimension to banking supervision.
Critics warn that politicizing financial oversight might have unintended consequences, particularly as this move contrasts with the administration’s broader deregulatory stance in the digital assets arena. Notably, recent legislation like the GENIUS Act aims to position the US as a global leader in cryptocurrency by providing regulatory clarity around stablecoins and easing supervisory burdens on banks engaging in crypto activities.
3. Additional Finance News Highlights
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Challenges for Big Four Accounting Firms in AI Adoption: Hywel Ball, former UK head of EY, noted in the Financial Times that the massive scale of the Big Four firms may hamper the cultural shifts necessary for effective AI integration, potentially giving an edge to smaller, more nimble competitors.
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European Pharma Shares Slide: The STOXX Healthcare index dropped 2% to a three-month low following renewed threats by Trump to impose tariffs on imported pharmaceuticals. Investor concerns include potential shifts in global supply chains as companies face pressure to relocate production to the US.
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South Korea’s Market Drop Amid Tax Reform Uncertainty: The KOSPI index fell 3.9%, dampening Asia’s best-performing market momentum. Despite strong capital inflows totaling $4.5 billion in July, apprehensions about tax reform progress and a persistent "Korea discount" weighed on investor sentiment.
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UK Company Director Exodus and Construction Slowdown: Analysis by the Financial Times revealed 3,790 directors left the UK since the government abolished favourable tax treatment for non-domiciled residents, a sharp increase from 2,712 last year. Many are relocating to the UAE. Meanwhile, UK construction activity contracted sharply in July, with the S&P Global PMI plunging to 44.3, the lowest since 2020, as housebuilding activity slows.
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Rising Insured Losses from Natural Disasters: Swiss Re estimates that the first half of 2025 saw $80 billion in insured losses from natural disasters, nearly double the 10-year average. Severe wildfires in California and intense storms across the US contributed heavily, with total losses for 2025 expected to surpass $150 billion as hurricane season advances.
4. Further Insights from Forum Stories
The World Economic Forum continues to provide in-depth analysis on pressing financial topics:
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Transforming Food Systems Amid Climate Volatility: Experts Aurora Matteini and Derek Baraldi discuss how sustainable finance can build agricultural resilience, reduce emissions, and protect livelihoods, drawing on the Forum’s Playbook of Financing Solutions for Food Systems Transformation.
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Understanding the GENIUS Act: Sandra Waliczek and Harry Yeung outline the significance of the first major US legislation aimed at stablecoin regulation and its impact on the crypto industry.
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Addressing the Global Retirement Savings Gap: In the Meet the Leader podcast, Yie-Hsin Hung, CEO of State Street Investment Management, examines the growing retirement crisis and advocates for comprehensive multi-pronged solutions as longevity trends reshape financial planning.
For more comprehensive coverage of financial and monetary systems and the latest market trends, visit the World Economic Forum Centre for Financial and Monetary Systems.
Rebecca Geldard is a senior writer covering global finance at the World Economic Forum. She specializes in market dynamics, regulatory developments, and economic policy.
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