Chancellor Rishi Sunak announced the UK will negotiate a financial services trade agreement with Switzerland to ensure firms in both countries can continue to access each other’s markets after the Brexit transition.
Mr Sunak said the countries were signing a joint statement committing them to talks on mutual recognition of banks, insurers, asset managers and capital markets.
Swiss banks Credit Suisse and UBS have major operations in London and nearly half of all Swiss financial services imports are from the UK.
Following the expiry of the Brexit transition at the end of December, the UK will lose the benefit of existing arrangements between the EU and Switzerland, which is not a member of the bloc.
The UK is keen to enter fresh bilateral agreements to protect its position as a leading global financial services hub.
Mr Sunak said: “I think we’ve both learned in recent years of the dangers of market fragmentation, and that unilateral approaches to trade in financial services just don’t work.”
A trade deal for financial services could reduce costs for firms and improve co-operation between regulators.
The Chancellor confirmed that the UK considers Switzerland’s stock market regulation equivalent to its own and that the UK would grant access for cross-border trading on stock exchanges after the Brexit transition.
It came as Michel Barnier warned that British trade negotiators will fail in their efforts to insulate the City of London from the worst consequences of Brexit.
The EU’s chief Brexit negotiator said British demands in the ongoing trade talks in Brussels were unacceptable and that UK plans to ditch EU financial regulation risked another crisis that could hurt the bloc.
UK proposals would make it easy to continue to run EU businesses from London after the end of the transition period, he said, and prevent the EU from freezing UK financial services out of the Single Market at short notice.