UK begins financial services talks with Swiss

Chancellor of the Exchequer Rishi Sunak opened formal talks with his Swiss counterpart on Wednesday in a bid to reach a post-Brexit trade deal for financial services.

David Sapsted

27 January 2021

The Treasury in London said the aim of the online discussions between Mr Sunak and Federal Councilor Ueli Maurer were aimed at reaching “a comprehensive mutual recognition agreement” in areas including banking, insurance, asset management and capital markets.“The UK and Switzerland are both global financial centres, with a shared commitment to high standards of regulation, market integrity and investor protection,” Mr Sunak said.“Our ambition is to deliver one of the most comprehensive agreements of its kind in financial services as part of our plan to seize new opportunities in the global economy now we have left the EU.”After his discussions with Mr Maurer, Mr Sunak held talks with the London bosses of some of the world's largest bank groups, who have expressed concerns over the lack of any agreement on financial services in the Brexit trade agreement struck with the EU just before Christmas.Ahead of this meeting, the Treasury said the chancellor would reiterate the government’s commitment to the nation's financial sector and express “confidence that Britain will remain one of the world’s pre-eminent financial centres”. These discussions coincide with continuing negotiations between London and Brussels over the possibility of the European Union agreeing to an equivalence arrangement that would give the UK financial sector greater access to continental markets - something it lost when the Brexit transition period ended on December 31.But City A.M. reported on Wednesday that sources close to these talks had suggested "that any agreement struck will only provide minimal access to EU markets at the absolute best and will more likely only set up a method for UK and EU regulators to swap information on decisions".The report added: "The only way the City of London can regain its pre-Brexit access to the EU is if Brussels grants regulatory equivalence across 40 areas. However, Brussels believes the UK is destined to diverge from its financial services regulations and has withheld the designation."If so, the talks with the Swiss, which are expected to take several months, take on an even greater importance, not least because an agreement could open up new markets to both nations.UK regulations aimed at granting share trading equivalence to Switzerland’s trading venues, which was banned by the EU two years ago, are due to enter force on February 3, subject to parliamentary approval. The Treasury said it expects the Swiss will reciprocate.