After the “Mind the Gap” strategy which was negotiated by the Swiss and British governments last year securing the current state of integration after Brexit – Swiss and UK Finance industry voices are now growing louder with regards to being able to co-develop a new standard for their respective financial centres away from restrictive EU regulations
Representing over 30 industry associations and organisations in Switzerland and the UK, economiesuisse and TheCityUK published a joint position paper which details joint industry requests for a bilateral financial services agreement between the two countries.
Given current EU regulatory rules, as well as similarities in the strong position of the Swiss and UK Financial markets, the paper calls for discussions to begin sooner rather than later on developing a new financial services standard to include banking and investment, asset management, insurance and financial market infrastructure.
Miles Celic, CEO of TheCityUK, commented: “We have the opportunity here to set a new gold standard for global services trade between two sovereign nations.”
The paper sets out 3 key principles for a future Swiss-UK relationship. These are:
- Aim beyond continuity to an ambitious future relationship
- Mutual recognition of regulation should be the objective
- Deepen institutional, regulatory and supervisory cooperation
The new agreement is intended to gradually liberalise rules. The goal is to set a new standard for the relationship between other open financial markets. This should enable exchanges, marketplaces, clearing houses and payment systems to operate smoothly in both markets.
Closer inspection of both Swiss and UK FRPS industries already points to strong synergies between the two countries. Services make up 75% of Switzerland’s economy and 80% of that of the UK and with bi-lateral trade in services totalling CHF 19.5bn in 2018, up from CHF 17.8bn in 2017. The two important financial centres also share the same regulatory outlook with similar views on openness and innovation in trade. A new agreement would strengthen this position.
While this may sound both logical and exciting to many, the ongoing Covid-19 crisis as well as the not insignificant transition of the UK from the EU, may slow things down or even complicate them further. Time will tell if Switzerland and the UK can quickly come together and form a strong bond and position themselves away from restrictive EU regulations.
The British are famous for their humour, the Swiss for their money management skills and given Covid-19 does not appear to be going anywhere soon, perhaps a reminder from the famous British comedian Spike Milligan is timely: “Money can’t buy you happiness” – he said – “but it does bring you a more pleasant form of misery”
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