KARACHI: The State Bank of Pakistan’s consolidated profit fell nearly 20% to Rs 1.999 trillion for the fiscal year ended June 30, 2026, as a sharp decline in interest and markup earnings outweighed a turnaround in exchange-related gains, according to the central bank’s consolidated financial statements approved Thursday. The central bank reported profit after tax ... Read more
Since the outbreak of the US-Israeli conflict with Iran in late February 2026, the six largest Wall Street banks have posted one blockbuster quarter after another. It’s a paradox that isn’t really one: market volatility — the very thing savers and businesses dread — is precisely what trading desks feed on.
Numbers That Boggle the Mind
On July 14, 2026, five of the biggest US banks reported earnings on the same day, and the results surprised even the most bullish analysts. JPMorgan Chase, the nation’s largest bank by assets, posted quarterly profit of $16.9 billion, once again driven by its equities trading division, which “took advantage of market volatility triggered by the war in Iran.” Revenue in that division jumped 35% year-over-year, and equity markets revenue soared 86%.
According to several financial outlets, JPMorgan’s profit — including gains on its equity holdings — actually came close to $21 billion for the quarter, an all-time record for the bank.
Goldman Sachs was no exception: the investment bank also handily beat forecasts, lifted both by conflict-driven volatility and by SpaceX’s record-breaking IPO, which Goldman co-led. Its merger-advisory fees rose 55%, and in the first half of 2026 alone it advised on $1.2 trillion in announced mergers and acquisitions — an unprecedented pace for any investment bank, putting it $425 billion ahead of its nearest rival.
All told, in the second quarter of 2026 alone, the five biggest banks combined (JPMorgan, Bank of America, Goldman Sachs, Citigroup and Wells Fargo) posted roughly $49 billion in combined profit. In the first quarter, the six largest US banks — those five plus Morgan Stanley — had already collectively booked nearly $48 billion in profit, well above year-earlier levels.
Why Does War Benefit the Banks?
The mechanism is no mystery to market professionals, even if it startles the general public. A trading floor doesn’t make money when markets are calm — it makes money when they move. Every geopolitical jolt — a military strike, a rumored ceasefire, a partial closure of the Strait of Hormuz — triggers waves of buying and selling across stocks, currencies and commodities. Every transaction generates fees.
Since the first US-Israeli strikes on February 28, 2026, bond, oil and stock markets have swung wildly with each twist of the conflict and every dashed hope of a truce. That chronic instability has directly fueled investment banks’ trading revenues.
On top of that comes an indirect effect: the war slowed, then unleashed in waves, mergers-and-acquisitions activity and IPOs — two highly lucrative businesses for investment banks, which collect substantial advisory fees on every deal.
Goldman Sachs itself acknowledges as much in black and white in its quarterly financial report filed with the US securities regulator (SEC): the Iranian conflict has had “significant implications for the global economy,” combining disrupted oil supply, higher oil prices and heightened equity-market volatility — precisely the ingredients of the trading desk’s playbook.
A Paradox That Goes Beyond the Banks
This phenomenon isn’t confined to the banking sector. Major oil companies — especially European majors with large trading arms, such as TotalEnergies — have seen profits surge on the back of price swings following the partial closure of the Strait of Hormuz, a route for roughly a fifth of the world’s oil and gas. Defense contractors, for their part, are reporting record order backlogs, led by Lockheed Martin, Boeing and Northrop Grumman, buoyed by allied nations rearming.
Meanwhile, households and non-financial businesses bear the flip side of that same volatility: higher energy prices, costlier freight, and mounting uncertainty for long-term investment. The conflict has thus become a vast transfer of wealth, in which the very instability harming the real economy is simultaneously enriching a handful of financial and industrial players positioned to capitalize on it.
At a Glance
Q1 2026: the six largest US banks combined for nearly $48 billion in profit.
Q2 2026: five of them posted roughly $49 billion in combined quarterly profit.
JPMorgan: record quarterly profit of nearly $21 billion (including gains).
Goldman Sachs: M&A advisory fees up 55%, with its M&A backlog at a five-year high.
Mechanism: market volatility, driven by the twists and turns of the US-Israeli conflict with Iran since February 28, 2026, has mechanically boosted investment banks’ trading and advisory revenues.
The Ministry of Finance in Paris (Bercy). Jean-François Gornet / Flickr, CC BY-SA
France has crossed a critical threshold as its public debt exceeded €3.5 trillion in the first quarter of 2026, reaching 117.5% of GDP. The French Court of Auditors has sounded the alarm over what it describes as an “alarming” fiscal situation, as public deficits hit record levels and debt-interest costs continue to soar.
The Ministry of Finance in Paris (Bercy). Jean-François Gornet / Flickr, CC BY-SA
Public Debt Exceeds €3.5 Trillion
During the first quarter of 2026, France’s public debt passed the symbolic milestone of €3.5 trillion, reaching €3.5361 trillion at the end of March. The figure underscores the scale of the country’s budgetary challenges.
To put this amount into perspective, France would theoretically have to sell its entire gold reserve, all publicly traded and privately held state assets—including companies such as EDF, Engie, and Airbus—as well as all government-owned buildings and land in an attempt to repay the debt in a single payment. Even such a drastic measure would likely fall short.
In just one quarter, France’s Maastricht-defined public debt increased by €75.6 billion, a sharp rise in a very short period. This growing debt burden reflects a longstanding reality: for more than fifty years, the French government, local authorities, and social security system have collectively spent more each year than they have collected in revenue, particularly through taxation. To cover this structural gap, France has continued borrowing from financial markets.
Debt-to-GDP Ratio Nears Historic High
Beyond the headline figure, analysts and financial institutions are particularly concerned about debt relative to economic output. According to France’s National Institute of Statistics and Economic Studies (INSEE), public debt now equals 117.5% of gross domestic product.
The increase has been dramatic. In 1980, public debt represented only 20% of GDP. By 2000, it had risen to approximately 60%. Over four decades, the debt-to-GDP ratio has nearly increased sixfold.
The current level of 117.5% is approaching the all-time record of 117.8% recorded in the first quarter of 2021 during the COVID-19 pandemic. At that time, President Emmanuel Macron launched an unprecedented economic rescue effort, pledging to spend “whatever it takes” to prevent economic collapse.
Although the health crisis has long since passed, France’s debt trajectory has not slowed significantly. Within the European Union, only Greece and Italy have higher debt ratios, making France the third most indebted country in Europe.
Warnings from the Court of Auditors
In response to what it views as a critical situation, France’s independent Court of Auditors, responsible for overseeing public finances, issued a warning report describing the state of the nation’s finances as “alarming.”
The report, revealed by France Inter and released ten months before the 2027 elections, calls for “strong, credible, and swift measures” to restore fiscal stability.
The court highlights several aggravating factors. First, France remains the only country in the eurozone whose debt level is higher today than it was at the end of the COVID-19 crisis. Second, public deficits continue to break records. France posted a budget deficit equal to 5.1% of GDP in 2025, the second-highest in the eurozone after Italy.
The government’s goal of keeping the deficit at 5% is viewed as unrealistic by the Court of Auditors, which fears a further deterioration of public finances.
Debt-Interest Costs Are Soaring
A particularly troubling development is the rapid increase in debt-servicing costs. As debt accumulates and interest rates rise in financial markets, the amount spent on interest payments has grown dramatically.
In the current state budget, debt-servicing expenses have become the government’s single largest expenditure category, surpassing spending on the national education system (excluding pension obligations).
Paradoxically, this situation coincides with a significant increase in taxation. Taxes rose by €38 billion across 2025 and 2026 as part of efforts to limit further deficit growth. Yet France already has the highest overall tax burden in Europe when taxes and social contributions are combined.
This creates both political and economic tensions: higher taxes have not been sufficient to slow the growth of public debt, raising questions about the effectiveness of current fiscal measures.
France’s current trajectory highlights a troubling economic reality: structural public spending is growing faster than tax revenues, creating a persistent deficit that is difficult to eliminate.
Programs such as social welfare, pensions, healthcare, and public investment involve long-term commitments, while tax revenues tend to fluctuate with economic conditions.
This divergence between economic growth and debt growth raises a fundamental question for France’s public finances. If GDP expands by only 1% to 2% annually while debt continues to grow by 3% to 4% per year, the debt-to-GDP ratio will inevitably continue rising unless major policy changes are implemented.
French voters heading to the polls in 2027 will likely face a difficult choice between maintaining current levels of public services and restoring fiscal sustainability.
Breaking the Debt Spiral
To reverse the trend, experts and institutions such as the Court of Auditors recommend a combination of measures: controlling the growth of public spending, improving the efficiency of existing expenditures, broadening the tax base without increasing marginal tax rates, and accelerating economic growth to boost revenues.
As the eurozone’s second-largest economy after Germany, France possesses significant economic resources. However, meaningful structural reforms will require political consensus and a willingness to accept difficult compromises.
In the short term, the government must demonstrate that its deficit-reduction commitments are credible. In the medium term, comprehensive reforms of public spending—particularly in pensions and healthcare—appear unavoidable. Over the long term, only sustained economic growth combined with spending discipline will be capable of reversing the debt dynamics that have characterized France for decades.
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