The first Trump administration issued interpretive letters approving banks to offer crypto services, including holding reserves backing stablecoins.

Circle’s USDC stablecoin is widely used in crypto-institution finance, says David Easthope, head of fintech at Crisil Coalition Greenwich. In contrast, Tether’s USDT is favored by businesses preferring to transact in US dollars rather than volatile local currencies. Both USDC and USDT are tied to the dollar.

Ripple’s XRP has enabled cross-border payments for several years, but most still travel through a network of correspondent banks. Mike Johnson, EY Americas Financial Services Solutions leader for Digital Assets and Tax, says complex cross-border wire payments that currently take one to three days could be settled nearly instantly using stablecoins.

“Transactions costs could decrease from traditional $10-$50 wire fees to less than $0.01,” he says.

Johnson also notes that stablecoins could enable instant intercompany transfers and more agile liquidity management, adding, “Stablecoins could also offer faster, lower-cost options for cross-border payroll, contractor payouts, and remittances.”

However, according to Easthope, it remains unclear whether the advantages of a jointly issued bank stablecoin would draw companies away from those they may already be using or even from conventional technology integrated into their existing platforms.

“Banks would test and learn within the parameters of the GENIUS Act,” he adds, “and clients will vote with their stablecoins.”

For its part, Banco BPM recently acquired asset manager Anima for over $2 billion.

“When the wave of consolidation rises, there is almost always a domino effect, with the banks trying to defend their competitive position. In Italy, it was triggered by Intesa’s merger with UBI in 2020, which widened the market share gap with smaller players. In particular, it put pressure on UniCredit—the second largest domestic bank—to strengthen their competitive position,” says Paola Biraschi, managing director, European Banks Credit Research, at CreditSights, a FitchSolutions company.

In a highly competitive context, many other Italian banks have recently made headlines.

Earlier this year, Monte dei Paschi, Italy’s oldest bank, took the country by surprise when it proposed a $14 billion all-share merger offer for private investment bank Mediobanca.

Meanwhile, Mediobanca announced a voluntary public exchange offer for 100% of Banca Generali, a deal worth $7.1 billion, to create an Italian leader in wealth management.

In January, Banca Generali completed its all-cash buyout acquisition of broker Intermonte for $112 million.

Another important deal is BPER Banca’s $5 billion, all-share exchange offer for its competitor Banca Popolare di Sondrio. The European Central Bank recently cleared the bid.

The fact that crisis-stricken Yes Bank is attracting highquality investors to replace SBI and other banks underscores its recovery following the 2020 crisis, giving a boost to the banking sector. SMBC is bullish about the Indian banking sector and is, therefore, aiming to invest for the long term.

After the transaction, SMBC will become the largest shareholder of Yes Bank and will appoint two members to its board. SBI will retain a 10.8% stake in Yes Bank, while other banks will collectively hold only a 2.9% stake. CA Basque Investments, affiliated with the Carlyle Group, and Verventa Holdings, an affiliate of Advent International, will retain 6.8% and 9.2%, respectively. The public will have a 50.26% stake in Yes Bank.

The entry of SMBC establishes a new precedent for future foreign acquisitions in India’s banking sector and enhances corporate governance standards. Furthermore, the deal will facilitate the exchange of goods and services between India and Japan.

Indian foreign investment norms cap voting rights for investors in banks at 26% and investments by financial institutions in Indian banks at 15%, a stumbling block for the entry of foreign investors. A higher cap on voting rights and an increase in investment threshold could encourage foreign investors.

“We already know that economic growth in the first quarter of 2025 was very strong. That’s a solid starting point,” says Miguel Cardoso, chief economist for Spain at BBVA Research. First-quarter GDP, published at the end of April, was 0.6%, quarter on quarter.

Over the past five years, Spain has drawn international attention for its robust growth compared with neighboring countries. A combination of strong domestic demand—driven by tourism, immigration, and public spending—has fueled a much-needed expansion while the country’s standard of living has edged closer to that of wealthier European nations.

Since 2021, when Spain began recovering from a steep contraction, GDP growth has consistently outpaced the broader eurozone. Last year, it notched 3.2% compared to 0.7% for the eurozone.

The International Monetary Fund (IMF) projects Spain’s growth will remain above the eurozone average at 2.5% in 2025, 1.8% in 2026, and a medium-term potential of around 1.7% for subsequent years, but warns of downside risks including escalating trade tensions, increasing domestic political uncertainty, and demographic aging.

Early on, some economists predicted that Spain’s streak of outperformance would be short, citing structural challenges such as a limited infrastructure capacity, persistently high unemployment, an aging population, and a shortage of innovation-driven, highvalue jobs. So far, however, those forecasts have proven incorrect.

In late April, a power blackout occurred across the Iberian Peninsula, demonstrating one aspect of weak infrastructure in both Spain and Portugal. Spain has poor connections to the European grid, which make it difficult to share power and balance supply and demand, especially when renewable energy generation fluctuates.

The day-long blackout “will probably subtract between 0.1% to 0.2% from GDP growth in second-quarter 2025,” Cardoso predicts, “depending on whether firms can recover anywhere between 75% to 90% of lost production.”

Most economists express cautious optimism, anticipating that the impact on Spain of the Trump tariffs and global trade tensions, while not negligible, will remain relatively contained.

“Spain’s direct exposure to US tariffs is very limited. Exports of goods to the US represent just 1% to 1.5% of Spain’s GDP,” Cardoso notes. “That’s three to four times less than Germany’s exposure.”

Exports to the US are concentrated in specific products such as olive oil. According to the EU, Spain exported over 118,000 metric tons of the liquid to the US during the 2023-2024 crop year, with higher volumes expected in the current season thanks to increased availability and lower prices.

The bigger concern lies in the economy’s indirect exposure to a potential recession in Germany, Europe’s economic powerhouse. “A recession in Germany would be very bad for Spain’s tourism sector,” Cardoso warns.

In recent years, tourism has been one of the key drivers of Spain’s economic growth. In 2024, the country welcomed a record 94 million international visitors, narrowing the gap with France, which remains the world’s top destination with 100 million. For economists, the question has been when the supply of tourism-related services—such as hotels, bars, and restaurants—would begin to show strain under rising demand.

So far, however, tourism continues to expand, stretching into off-peak seasons and reaching less traditional destinations.

“Data through March show that foreign spending in Spain is still growing at double-digit rates. Credit card spending by foreigners rose 12% to 13% year-on-year in the first quarter,” Cardoso notes.

Tourism patterns are also shifting, he says, as travelers take shorter, more frequent trips rather than the traditional, fixed-period family holidays. The change is enabling a more efficient use of tourism infrastructure, he says.

But growth in demand could still hit a limit in the number of hotels, restaurants, and other structures available.

“There are already signs of price pressures, and infrastructure will soon reach its limits,” says Sergi Jiménez-Martín, professor of Economics at Pompeu Fabra University in Barcelona. “I wouldn’t mind seeing a negative shock to tourism, as it could ultimately benefit the economy by encouraging more semi-skilled youth and immigrants to shift into other industries.”

Tourism is a low-productivity, lowvalue-added sector, he argues, and redirecting employment toward other areas could lead to a more efficient and healthier economy.

Another element behind Spain’s recent outperformance is immigration.

“The Spanish economy expanded significantly, partly because the Covid-19 shock was so severe but also because of strong population growth, with about 2 million new residents, mostly from Latin America,” Jiménez-Martin says. Shared language and cultural ties have helped make immigration a net benefit for the economy, he adds, and while the new residents have often been low- or middle-qualified workers, a more promising expansion would be in different high-value growth sectors.

The pharmaceutical industry stands out as a success story. Accounting for some 1.5% of GDP and employing about 170,000 people in high-value jobs, it plays a still-small but promising role in the economy.

Spain is already one of the world leaders in clinical research. Since last year, it has ranked first in Europe, conducting nearly 1,000 clinical trials annually and surpassing Germany for the first time. Coming as countries like Germany and Belgium are seeing declines, this growth is driven by tax incentives, a cost-effective and skilled workforce, and a relatively fast regulatory process.

“Spain has some of the world’s fastest approval times,” says Oscar Salamanca, CEO of Ápices CRO, which provides support for clinical trials, and president of the Spanish Association of Contract Research Organizations (ACRO). “The time to treat the first patient is usually 90 to 100 days, compared to up to 300 in other countries. Costs are also much lower: up to five times less than in the US and two to three times lower than in much of Europe.”

These advantages have attracted global pharmaceutical giants like Novartis, Roche, and AstraZeneca, to establish research centers in Spain: particularly in Madrid and Barcelona, with additional hubs in Valencia, Seville, Málaga, and Santiago de Compostela.

While tourism and pharmaceuticals, each in its own way, point toward future economic growth, a relatively low level of investment—mostly due to regulation and uncertainties—has many economists worrying that high public debt and an uncertain political landscape will cause Spain to hit its infrastructural limits in the coming years.

The government of Prime Minister Pedro Sánchez is a coalition between the socialist PSOE and other political forces to its left, including the main Catalan nationalist party. A new general election is to be held by August 2027.

Public debt level as a percentage of GDP was 101.8% at the end of last year. According to the latest IMF report, Spain’s debt remains vulnerable to growth and financing cost shocks.

“Given still-high debt and the economy’s strong cyclical position,” the IMF recommended in its April report, “there is a case for frontloading the authorities’ planned adjustment, strengthening the national fiscal framework to ensure that regions contribute to the consolidation effort, and adopting employmentfriendly measures to address the projected growing gap between pension expenditures and social security contributions.”

Among the IMF’s suggested moves are harmonizing VAT rates and strengthening green taxation: measures that could replace a less effective banking tax that was introduced three years ago and could now be phased out.

The IMF praised Spain’s financial system and the stability of its banks. BBVA’s plan to merge with smaller rival Banco de Sabadell moved one step forward on April 30, when the National Authority for Markets and Competition (CNMC) approved the deal under certain conditions, although other authorizations are still required.

While Spain has undoubtedly been a post-Covid success story, the IMF stressed that to stay on this positive trajectory, maintaining sound fiscal and regulatory policies and avoiding missteps that could derail progress will be essential.

A week later, however, UniCredit said its €10 billion unsolicited bid for domestic rival Banco BPM had stalled after the Italian government imposed conditions under its so-called Golden Power rules, which allow the state to block or place restrictions on corporate takeovers in strategic sectors. Citing requirements for credit and liquidity management, asset disposals, and its remaining operations in Russia, the bank stated that it was not in a position to make any decisions at this time. UniCredit is one of the few global banks that chose not to exit Russia following the full-scale invasion of Ukraine in 2022. CEO Andrea Orcel stated he would not harm shareholders by selling assets at an unfair price.

If European banks continue to generate lower returns on investment compared to some of their global peers, and the sector remains somewhat fragmented along national lines, Orcel is certainly not to blame. The bank has recently reported record profits and is actively pursuing a bold strategy of mergers and acquisitions across the continent.

Orcel, who earlier in his career worked at Goldman Sachs and Merrill Lynch, was CEO of UBS Investment Bank for most of the 2010s. Since he became head of UniCredit in 2021, the lender’s stock price has increased sixfold. With UniCredit’s acquisition of Commerzbank’s stake, the largest cross-border banking deal in Europe since the global financial crisis, Orcel strengthened his reputation as a prolific rainmaker. Still, the resistance he met from unions and politicians in Germany and Italy doesn’t bode well for the EU banking sector as a whole, which is facing a pressing need for consolidation and a more integrated, profitable framework.

It could be a harbinger of things to come.

After years of keeping their distance, movers and shakers in the traditional financial world appear ready to play ball when it comes to cryptocurrencies and stablecoins. (Stablecoins are a type of cryptocurrency designed to maintain a stable value over time; they are typically pegged 1:1 to the value of traditional currencies like the US dollar or the euro.)

“The financial services industry is on the verge of entering the crypto economy,” Fortune reported Bank of America CEO Brian Moynihan saying in February. And in March, Fidelity Investments, one of the world’s largest asset managers, was reported to be in advanced testing of its own stablecoin.

Competitive pressure and the need for a fast time to market are key drivers—fueled by rising demand from clients, including corporates, and by a shifting macroeconomic backdrop marked by Trump-era tariff threats and doubts about the global dollar system’s resilience. Together, these forces are pushing banks and asset managers to hedge geopolitical risk and tap new revenue streams through digital assets.

The Intesa purchase was made through Boerse Stuttgart Digital, which recently became Europe’s first regulated exchange for trading digital assets under the EU’s new Markets in Crypto Assets Regulation (MiCA) framework. The exchange is a unit of venerable Boerse Stuttgart Group, Europe’s sixth-largest exchange group.

“Institutional adoption of crypto assets is gaining momentum across Europe,” observes Joaquín Sastre Ibáñez, chief revenue officer at Boerse Stuttgart Digital. He expects other European banks and institutional investors to follow Intesa’s footsteps.

“In Germany, for example, we have recently partnered with DekaBank to offer crypto trading to institutional clients,” Sastre Ibáñez notes. Many financial institutions had been waiting for a clear regulatory framework before introducing crypto offerings to their customers, which MiCA now provides.

It’s not just in Europe that the crypto temperature is rising. In early March, the US established a Strategic Bitcoin Reserve, and many individual US states, most notably Texas, could soon have bitcoin reserves of their own. Pension funds, too, are “dipping their toes into buying bitcoin,” The Financial Times reported in January, including funds in the UK and Australia, “a sign that even typically staid corners of finance are finding it hard to ignore the potential outsized returns from cryptocurrencies.”

In the US, stablecoin legislation moved out of a key Senate committee with bipartisan support in mid-March and passage is soon expected. The legislation sets clear rules for stablecoin issuers, requiring full reserve backing and compliance with anti-money laundering laws to safeguard consumers and reinforce the US dollar’s global standing. Stablecoins often act as a bridge between crypto and national currencies; they share the same underlying blockchain technology as tokens like bitcoin and Ethereum.

“The US’s pro-crypto stance is reshaping the global financial landscape by integrating digital assets into the mainstream economic agenda,” says Federico Brokate, head of US Business at 21Shares, a cryptocurrency exchange-traded fund (ETF) provider based in Switzerland.

The creation of the US Strategic Bitcoin Reserve along with the US Digital Asset Stockpile, consisting of tokens other than bitcoin, marks a significant shift in institutional perception, he adds, “positioning cryptocurrencies as essential financial instruments rather than speculative assets. This move not only signals long-term confidence in digital assets but also sets a precedent for other nations.”

“Digital assets are here to stay, as convergence of traditional and digital finance advances.”

Joaquin Sastre Ibanez, Boerse Stuttgart Digital

Two major pension funds in the US have already made significant investments in spot bitcoin ETFs: The State of Michigan Department of the Treasury and the State of Wisconsin Investment Board. The latter has committed more than $300 million to IBIT, BlackRock’s spot bitcoin ETF.

“We expect this trend to continue among pensions as regulatory clarity continues to progress in the US,” says Brokate. Institutional interest extends to other regions as well, he adds; Abu Dhabi’s Sovereign Wealth Fund has invested more than $450 million in IBIT.

Simon McLoughlin, CEO of UPHOLD, a cryptocurrency trading platform, sees stablecoins in particular as playing a key role in transforming global finance. “Stablecoins are the future of money,” he says, “so much so, in fact, that in 10 years’ time, we won’t even refer to stablecoins. They will just be money.”

“Stablecoin issuance has grown rapidly in recent years and become a significant part of the financial system,” S&P Global Ratings concluded in a February report. “Stablecoins could enable smoother transactions, faster settlements, and lower costs for cross-border payments—especially in areas that lack access to traditional banking infrastructure.”

Indeed, stablecoin market capitalization reached $230 billion in mid-March, up 56% from a year earlier; analysts at Bernstein predict market cap could exceed $500 billion by yearend.

Fintechs like Tether (USDT) and Circle (USDC) are pioneering the issuance of stablecoins, but other issuers may soon jump in.

“There will be stablecoins run by municipalities, businesses, and other organizations,” McLoughlin predicts. “But most importantly of all, there will be stablecoins issued directly by banks. We will have branded money.”

CFOs may have to adjust their thinking accordingly, he adds.

“CFOs need to start preparing now for a future where some of the functions of corporate treasury and international accounting are fulfilled on the blockchain,” McLoughlin said. When it comes to international payments, for instance, “if one of your rivals is using stablecoins to move money around the world and your business is not, you will be at a distinct disadvantage.”

What about cryptocurrencies proper, like bitcoin? Unlike stablecoins, their market prices have always been volatile. But as more traditional financial firms embrace the crypto economy, those wild price gyrations may flatten out, anticipates Geoff Kendrick, global head of digital assets research at Standard Chartered.

“Institutional buyers are less likely to sell on bad days than are leveraged retail buyers,” he says.

Moreover, custody solutions from traditional financial institutions like BNY Mellon or State Street could make storing crypto easier and more secure than current offerings by crypto-focused fintechs. Regulatory clarity in places like the US, too, could lead to less volatility while helping to “remove FTX issues,” says Kendrick, referring to the market-roiling collapse of the Bahamas-based cryptocurrency exchange in November 2022.

More institutions are interested today in both selling crypto to retail clients and diversification for their own corporate treasuries, says Boerse Stuttgart Digital’s Sastre Ibáñez. His group is partnering with Germany’s DZ Bank, for instance, to offer its retail clients direct access to crypto trading and custody.

If cryptocurrencies become less volatile, more pension funds and insurance companies could dive in, too. In December, one of Australia’s largest superannuation fund providers, AMP Limited, made a A$27 million ($16.4 million) investment in bitcoin futures, which CIO Anna Shelley described in a commentary on AMP’s website as a “cautious step” into bitcoin futures for members. Bitcoin could potentially be used as an alternative store of value to gold, she wrote, on the negative side, bitcoin “offers no yield.”

Still, many of Australia’s super funds—a category that includes pension funds—“already invest in many assets that have no yield,” Shelley noted in her commentary, “such as foreign currencies, derivatives and commodities, and even some listed companies [that] make no profit and deliver no dividends.”

Some partisans set crypto’s sights even higher; one day, they say, central banks might invest in cryptocurrencies for diversification.

“Central banks considering investing in bitcoin could be emboldened by the fact the US government is going to at least hold on to the 270,000 bitcoins it currently owns, and potentially buy more at some stage,” Kendrick wrote in a January note, as reported by The Wall Street Journal.

Elsewhere, Aleš Michl, who heads the Czech National Bank, told The Financial Times in January that he would present a plan to his board to invest in bitcoin as a way to diversify the central bank’s reserves.

This proposal drew a flutter of scornful reactions. “Michl is mixing up the role of a central banker with that of a portfolio manager,” Elias Haddad, senior market strategist at Brown Brothers Harriman, told Bloomberg.

Indeed, some of this blue-sky speculation may not be accounting for all the risks.

“Stablecoins, issued by private entities, can fail like banks, risking de-pegging,” says Hanna Halaburda, associate professor at New York University’s Stern School of Business. Then, too, stablecoins are traded on blockchain networks, “offering decentralization and programmability but facing congestion risks and high costs.”

In addition, she notes, stablecoins have limited practical use in the US and some other countries where “traditional banking services are already efficient and reliable.” The largest demand for US-denominated stablecoins is overseas, “particularly in regions with unstable currencies or costly financial infrastructure.”

In many African countries, for example, “stablecoins provide a way to hold digital dollars, preserving purchasing power in economies plagued by inflation,” Halaburda notes. “They are also widely used for cross-border transactions, offering a faster and often cheaper alternative to traditional remittance services.”

But if a US central bank digital currency (CBDC)—a digital dollar—were ever made accessible internationally, that “could potentially serve these roles even more effectively,” she adds.

CBDCs are not cryptocurrencies, of course, but they are digital money like stablecoins: and the two may be in competition. Facebook’s Libra stablecoin, announced back in 2019, spurred digital currency awareness among central banks. The project was later abandoned, but as of February 2025, 134 countries and currency unions, representing 98% of global GDP, were exploring a CBDC, according to the Atlantic Council’s Central Bank Digital Currency Tracker.

CBDCs remain controversial, however, particularly in Western countries, where they come freighted with privacy questions. In January, an executive order by President Trump banned research and development for a US CBDC.

Trump’s rejection of a digital dollar, and his embrace of stablecoins, appears to have spurred the EU to speed up implementation of its own CBDC project. European Central Bank President Christine Lagarde said recently that Europe needs to push fast on the digital euro.

“Accelerating its implementation suggests that [EU] policymakers see strategic value in a CBDC, particularly in a rapidly evolving global financial landscape,” says Annabelle Rau, an associate at McDermott Will & Emery in Germany. “However, its success will depend on striking the right balance between innovation, privacy, and financial stability.”

The EU has set a high standard for privacy with its General Data Protection Regulation, Rau notes. “Nonetheless, public trust will be crucial, and addressing concerns around data access, anonymity, and surveillance risks will require clear legal safeguards and transparent communication from policymakers.”

Stablecoins and CBDCs might eventually co-exist, although the importance of their role could vary from country to country, Halaburda suggests.

“China favors state-controlled rails and discourages blockchain-based finance, making the digital yuan likely to prevail,” Halaburda says. “The EU is regulating stablecoins under MiCA while taking a cautious approach to the digital euro, allowing both to coexist. In the US, stablecoins thrive in the absence of a CBDC, though pending regulations could either strengthen their role or constrain them in favor of a digital dollar.”

Whether it be cryptocurrencies, stablecoins, or central bank digital currencies, a consensus appears to be forming that “digital assets are here to stay, with mainstream adoption accelerating as the convergence of traditional and digital finance advances every day,” Boerse Stuttgart Digital’s Sastre Ibáñez says. If so, “corporate CFOs should be aware of the growing importance and adapt by integrating digital assets into their financial strategies while ensuring compliance with evolving regulations.”

Fundamental challenges remain, particularly in governance, risk management, and regulatory oversight. “While some convergence is taking place, particularly in areas such as digital securities and asset tokenization, it is likely that elements of both [crypto and traditional currency] systems will continue to coexist rather than fully merge in the near future,” says Rau.

McLoughlin, at UPHOLD, remains buoyant. Consider only the trillions of dollars locked up in banks today to facilitate international transactions, he argues. Indeed, $10 trillion are held in nostro/vostro accounts globally, according to a December report from Bitso Business. “Imagine,” McLoughlin suggests, “what we could do if those funds were available to power growth instead.”

Mounting recession fears, renewed trade tensions, and shifting political winds are weighing heavily on corporate dealmakers and private equity firms—particularly in the US, where valuations remain flat.

“Deals got done in Q1 but it has been slow and will probably get slower as the year progresses. I have been asking for updated 2025 projections but there is uncertainty in the markets and how the tariffs will play out, and a hesitation to provide those 2025 projections,” says David Acharya, managing partner at Acharya Capital Partners. “I have been hearing similar comments from my peers—senior investment partners with investment committee responsibilities.”

Consider the numbers. As of May 1, Dealogic shows US M&A value is at $575.6 billion. That’s down 1% compared to this time last year. Other regions are on the opposite trajectory: Japan, $42 billion (up 133%); Asia, $251.4 billion (73%); Canada, $52.4 billion (54%); Middle East/Africa, $31.4 billion (51%); and Europe, $257.8 billion (7%).

For the numbers to be where they are, investment banks don’t have many mega deals to boast about. In March, Google’s parent company, Alphabet, purchased cybersecurity startup Wiz for about $32 billion. There was also the $16.4 billion agreement between Constellation and Calpine Corp., as well as the $22.8-billion investment from China’s Ministry of Finance into four state-owned banks. In Europe, Austria’s OMV cut a deal with Abu Dhabi National Oil Co. to merge their respective polyolefins businesses; the combined entity proceeded to buy NOVA Chemicals Corp for $13.4 billion.

Technology, finance, health care, utilities, and oil and gas remain the most vibrant sectors across the globe. Technology and finance both exceeded last year’s three-month period in terms of dollars spent.

“In the US, M&A volume has decreased on a year-on-year basis, while most other markets in Asia and Europe have gone up,” Takashi Toyokawa of Ignosi Partners, says. “I’d expect this trend to continue over the next couple of quarters until there’s some level of certainty in the US.”

For the first quarter, the US Commerce Department announced that the economy shrank for the first time in three years. The 0.3% contraction was fueled by businesses scrambling to strategize in response to President Donald Trump’s confusing trade policy.

“While we’re seeing that deals that have been in the works since last year are still getting across the finish line, the uncertainty driven by the imposition of tariffs in the US and increase in long-term interest rates, which in turn has led to market volatility, has definitely caused potential acquirers to think twice before doing deals,” Toyokawa adds.

The current scenario is in stark contrast to what big banks were expecting at the end of 2024 and the start of 2025.

“The pace of mergers and acquisitions around the world gained momentum [in 2024], and there are signs that deal-making will accelerate in 2025,” Stephan Feldgoise and Mark Sorrell, Goldman Sachs’ M&A co-heads, said in a joint statement back in December.

JPMorgan Chase CEO Jamie Dimon was also bullish. Just days before Trump’s inauguration, the bank boss remarked: “Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business.”

Not anymore. According to The Wall Street Journal, Dimon recently told investors at IMF meetings that a recession is the best-case outcome.

Hopes that a second Trump term would bring looser M&A regulations have also been dashed. The Department of Justice and Federal Trade Commission are proving just as tough as they were during Trump’s first term, as well as under former President Joe Biden. Recent lawsuits blocking Hewlett Packard Enterprise’s $14.3 billion acquisition of Juniper Networks and GTCR’s $611 million Surmodics buyout show that even under Trump, antitrust enforcers aren’t easing up.

The will-they-won’t-they dynamic between U.S. Steel and Tokyo-based Nippon Steel isn’t serving as a useful gauge for how the White House plans on handling M&A regulations, particularly when it’s a cross-border proposal. Under Biden, the deal was blocked due to what the former administration considered national security risks. Trump opposed it last year, but has been indecisive on the matter.

“The market was thinking there would be relief from the harsh anti-merger stance from the Biden administration, not open season on M&A,” Accelerate Fintech’s Julian Klymochko says. “Safe to say, that hasn’t happened.”

Whether M&A pros find that early-year optimism again remains to be seen. After all, hopes were high that pent-up demand, ample capital, and a business-friendly presidential administration would fuel a wave of consolidations.

Instead, dealmaking momentum has stalled, weighed down by rising market volatility and growing economic uncertainty, Andrew Lucano, co-chair of the M&A practice at law firm Seyfarth Shaw, explained.

“Recent US trade policies have introduced significant unpredictability, triggering market swings and prompting caution among deal participants, especially those with exposure to tariff risk,” Lucano says. “Uncertainty has always been one of the greatest inhibitors of dealmaking, and that’s exactly where we are right now. As a result, many players are adopting a ‘wait and see’ approach, at least in the near term, as they assess the full impact of tariffs and any potential retaliatory measures.”

Carney earned high marks as a central banker during both the global financial crisis and Brexit. Global Finance magazine awarded him an “A” grade in its annual Central Banker Report Cards in 2012 during his tenure in Canada, and again in 2016 in the UK, along with two “A-minus” grades in 2018 and 2019. He led the Bank of Canada from 2008 to 2013 and the Bank of England from 2013 to 2020. Unlike Poilievre, Carney has never held elected office and is, in many ways, a newcomer to frontline politics.

The Canada Mark Carney will lead is a very different one than any of his predecessors have in recent memory. With Donald Trump back in office, Canada has united against the imposition of a trade war by the US with tariffs that threaten economic stability, in areas such as autos, lumber and aluminum, as well as a president who has stated he would like to erase the border and make Canada the 51^st state. Canadians have been shunning American products and cancelling vacations to the US in protest. In many respects, Trump’s policies, which where a major talking point of all candidates during the run up to the election, were the biggest influence in putting Carney in office.

When Parliament resumes, Carney has promised to implement an agenda that will fight an economic war with its biggest trading partner and oldest ally. The new prime minister has promised to sit down with President Trump and reconvene a conversation on trade they started when Carney took over from Trudeau after he was made head of the Liberal Party in early March. Also, a middle-class tax cut has been promised that he says will save two-income families up to C$825 ($594) per year.

Because of a massive housing shortage in the country, the Liberals have promised to create a “Build Canada Homes” policy that would double the speed of construction to 500,000 homes per year and would invest C$35 billion for prefabricated home builders and low-cost financing capital for builders. In other areas often difficult to navigate in Canada, Carney has promised to look at reducing interprovincial trade barriers as well as strengthening the country’s ability to produce and export energy.

Carney’s previous roles and international experience make him a known quantity to leaders overseas. After his victory, European Commission President Ursula von der Leyen said on X, formerly Twitter, “The bond between Europe and Canada is strong — and growing stronger. I look forward to working closely together, both bilaterally and within the G7. We’ll defend our shared democratic values, promote multilateralism, and champion free and fair trade.”

British Prime Minister Keir Starmer said in a statement that the connections between Carney and the U.K., stemming from his time as governor of the Bank of England, are extremely important. “With your leadership, and personal ties to the U.K., I know the relationship between our two countries will continue to grow,” Starmer added.

Those ties will become even more important as Canada pivots from a north-south economic orientation toward stronger ties with Europe. Carney’s first trips as Liberal Party leader in March were to Paris and London, where he told French President Emmanuel Macron that Canada was the “most European of non-European countries.” With his leadership secure and the election behind him, Carney will face his first international test as prime minister in June, when he hosts the G7 Leaders’ Summit in Kananaskis, Alberta.

— Read about Mark Carney’s grading as UK bank governor in Global Finance’s Central Banker Report Cards in 2016.

— Read about Mark Carney’s grading as Canada bank governor in Global Finance’s Central Banker Report Cards in 2012.

Global Finance: Standard Chartered is this year’s Best Investment Bank for Infrastructure Finance. How does this award reflect the firm’s mission?

Abbas Husain: This award reinforces our role as a trusted partner in driving sustainable development and economic progress. It reflects our commitment to delivering innovative financial solutions that enable critical infrastructure projects, strengthen trade corridors, and support long-term growth.

GF: Is infrastructure finance changing?

Husain: Alternative sources of capital—development finance institutions (DFIs), export credit agencies (ECAs), infrastructure funds, and capital markets project bonds—are becoming increasingly important.

We’ve also seen longer tenors for strategic projects. Some megaprojects, particularly in renewables and infrastructure, are securing tenors beyond 20 years. Middle Eastern deals structured with short-term vehicles like “soft-mini perms”—a type of loan that becomes subject to more onerous terms if it is not refinanced by the maturity date—have incentivized sponsors to refinance before the contractual maturity of the facilities. There’s also been an increased use of refinancing strategies as sponsors secure short-term bank financing with plans to refinance via the bond market.

GF: In which regions are you seeing the most innovative infrastructure projects?

Husain: There’s a strong pipeline. MENA is home to many major infrastructure projects for transportation, water and waste management, and renewables and green hydrogen. Regional governments are actively pursuing privatization and public-private partnerships (PPPs) to attract foreign investment and ease fiscal pressures. Meanwhile, infrastructure has become an attractive asset class for banks, private credit, and sovereign funds.

Husain: There’s a strong pipeline. MENA is home to many major infrastructure projects for transportation, water and waste management, and renewables and green hydrogen. Regional governments are actively pursuing privatization and public-private partnerships (PPPs) to attract foreign investment and ease fiscal pressures. Meanwhile, infrastructure has become an attractive asset class for banks, private credit, and sovereign funds.

Governments are accelerating their clean energy targets, resulting in several large-scale solar/wind, waste-to-energy, carbon capture, and green hydrogen projects. Growing water scarcity concerns are driving investments in desalination and wastewater treatment, with many pro-jects structured as PPPs. We are witnessing a renewed demand for baseload power after several years of focus on renewable energy, leading to a surge in the number of combined-cycle gas turbine projects in the region. Driven by the need for energy storage and peak shaving, or load shedding, we are also seeing a surge in projects related to battery energy storage systems.

GF: What trends do you expect will shape the infrastructure sector in the next year?

Husain: Global spending in clean energy investments exceeded $2 trillion for the first time in 2024. Achieving net-zero targets by 2030 will require even greater capital commitments, creating opportunities for innovative financing solutions.

At the same time, AI and digitalization are driving demand for data centers, with trillions of dollars in investment anticipated by 2030. Institutional investors and sovereign wealth funds are playing an increasingly active role in this space, particularly in high-growth regions.

Beyond sector-specific developments, we are likely to see an increase in refinancing and capital market solutions as sponsors adapt to evolving high-interest-rate conditions and seek to optimize their capital structures. This will drive demand for capital market solutions and alternative financing, including private credit, institutional funds, ECAs, and DFIs.

GF: Is investor appetite for infrastructure and project finance deals keeping pace?

Husain: Despite the rising complexity of cross-border investments, infrastructure projects have long-term economic viability, and we continue to see significant interest. Also, there are vast capital pools; Global Infrastructure Investor Association members have more than $2 trillion in assets under management either invested or ready to invest. In addition to ECAs, classic infrastructure funds, and multila-teral development agencies, we have seen pension funds, insurers, and asset managers flood the market in search of alternative and stable long-term growth.

GF: How are regulations impacting infrastructure finance?

Husain: Some of the most acute funding shortfalls are in developing markets. Addressing these requires public and private capital, impactful policy initiatives, appropriate risk allocation, and greater cross-border collaboration. To attract more investor capital, we need to help these markets pursue policy liberalization, address risks and governance issues, and provide transparent avenues for sustainable investing. The success of some ASEAN markets has been driven in large part by similar initiatives while China, for example, demonstrates the benefits of opening financial markets to global trade and collaboration.