'Gold standard' plan for financial services

Proposals for a new "gold standard" in international trading relationships for financial services has been proposed in a joint report from leading Swiss and British finance industry advocacy groups.

David Sapsted

29 April 2020

The report, ‘Future-proofing the UK-Swiss Financial and Related Professional Services Relationship’, has been drawn up by the TheCityUK and Economiesuisse with the intention of establishing a template for a post-Brexit trading relationship between Europe’s two largest financial centres."Deepening key trade and investment links beyond Brexit will be even more vital against a backdrop of Covid-19 to support economic recovery," says the report.The proposals include calls for a trading relationship based on the mutual recognition of regulation, rather than the EU principles of equivalence. The UK and Switzerland, says the report, should build closer strategic ties, building on their shared approach and outlook to financial regulation, to better coordinate shared objectives in a global regulatory setting.According to the report, an agreement could be achieved swiftly given the two nations profiles in bilateral trade, and would be a "win-win" for both countries. It adds that such a relationship would be a template for the next generation of trade and investment deals by covering such issues as data and cyber security.Miles Celic, CEO of TheCityUK, said: "To meet the significant social and economic challenges arising from the global Covid-19 pandemic, it is critical we keep markets open and trade flowing through expanding our international trade and investment links."We have an opportunity here to set a new gold standard for global services trade between two sovereign nations. These relationships will underpin our collective responses to the crisis help fuel global economic recovery over the long term.
“The UK and Switzerland are natural partners for financial and related professional services trade. As the first and third largest net exporters of these services globally, both countries are committed to developing high-quality global standards and maintaining open and efficient markets."Monika Rühl, who chairs the executive board of Economiesuisse, added: "The challenge posed by Covid-19 means we have to work harder than ever to help international markets to stay open and allow trade flows to continue."The financial and related professional services industry has an important role to play in providing solutions to government, individuals and companies. We are determined that the UK and Switzerland should be at the forefront of providing such leadership.“Our countries already share a substantial trade relationship in both goods and services, but more needs to be done to ensure frictionless market access now the UK has left the EU. Achieving this goal will provide an essential engine for driving economic growth and prosperity. It also presents an opportunity for greater strategic cooperation towards the goal of liberalising international services trade.”The paper sets out what an ambitious UK-Swiss relationship could encompass based on three objectives:

New trade and investment arrangements tailored to UK and Swiss needs, particularly for financial and related professional services trade, focused on high standards and the ambition to secure and broaden mutual market access.
Mutual recognition of regulation to allow the cross-border provision of financial services to be expanded based on comparable outcomes rather than on line-by-line regulation.
Deeper institutional, regulatory and supervisory cooperation, which should be introduced before the UK transition period with the EU ends on December 31.

The report points out that the UK is the world’s largest net exporter of financial services ($82.67bn), followed by the US ($63.18bn) and Switzerland ($23.37bn), and that services account for about 80 per cent of the UK’s economy and about 75 per cent Switzerland’s, "with financial and related professional services making up a significant component of these figures".