London financiers have largely lost access to EU markets, but the UK says its recognition of Swiss banking and asset management rules is 'ground-breaking'
ADVERTISEMENTUK-based financial firms will be able to serve Swiss clients using domestic rules, under an agreement signed by British finance minister Jeremy Hunt today (21 December).
The mutual recognition deal, under which both countries agree to accept each other’s regulations for sectors like banking, investment and asset management, comes after financiers in the City of London lost significant access to the much bigger EU market next door.
“The Berne Financial Services Agreement is a global first,” Hunt said in a statement, describing it as a "blueprint" for deals with other trade partners.
The “ground-breaking” agreement gives British insurers a unique right to serve Swiss clients without a base in the country, and is “only possible" due to the new legal situation post-Brexit, the statement added.
The UK's finance and insurance trade with Switzerland grew by 53% since 2016, reaching £3.28 billion in 2022, the UK Treasury said.
Brexit also meant that UK-based banks and brokers could no longer trade freely across the EU bloc, however, and Brussels has been reluctant to open up its market by deeming British laws equivalent to its own.
UK-based banks moved £900 bn in assets to places such as Dublin, Paris, Frankfurt and Amsterdam, one 2021 study by London-based think tank New Financial found, after regulators such as the European Central Bank called for operations to shift to locations within the bloc.
