Britain and Switzerland are deepening ties between their financial services sectors with a new post-Brexit deal.
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LONDON — Britain and Switzerland signed a post-Brexit financial services deal Thursday aimed at bringing two of Europe’s biggest banking centers closer together.
British Chancellor of the Exchequer Jeremy Hunt told CNBC that the “first of its kind” deal was a victory for Britain after Brexit, which “would not have been possible to sign” within the European Union.
He added that the mutual recognition agreement, called the Bern Financial Services Agreement, would provide a “blueprint” for future deals with other countries.
“This is a new type of trade agreement that we can use as a model for future agreements we have with other markets,” Hunt said at a press conference announcing the deal.
Hunt was in Bern to sign the agreement with his Swiss counterpart, Karin Keller-Sutter, who said it would “increase the international competitiveness” of both markets in the long term.
The deal, which follows more than two years of negotiations, aims to streamline business ties between financial firms and wealthy individuals in the two markets and improve cross-border access to a range of financial services sold by banks, insurers and asset managers .
More specifically, it will enable Swiss companies to serve wealthy individuals in Britain, both locally and cross-border, replicating the privileges currently available to British companies in Switzerland. British advisers are also allowed to ‘temporarily’ serve wealthy clients locally in Switzerland without registering in the country.
The terms also include new equivalence arrangements for the provision of certain cross-border activities by financial services providers and insurers in both Switzerland and the United Kingdom.
Hunt described the plans as a “light, progressive, forward-looking way to open market access” that would provide a significant boost to the City of London.
The deal must be approved by the parliaments of both countries before it enters into force next year. However, some commentators were optimistic that this would improve the equivalence framework that Britain had with Switzerland when it was still in the European Union.
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David Henig, British director of the independent think tank the European Center for International Political Economy, said the deal was “generally good news” that would strengthen British influence in the financial services sector.
British Prime Minister Rishi Sunak initially launched talks with Switzerland in 2020 when he was finance minister, claiming the deal would demonstrate the countries’ shared vision of an “open, global and free” economy.
Britain’s current Conservative government has long positioned signing new trade deals as a key benefit of Brexit. In June, Britain signed a deal to join an 11-nation Asia-Pacific free trade bloc that includes Australia, Singapore, Japan and Canada. This is the third new trade deal since it formally left the bloc on January 31, 2020.