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UK chancellor Jeremy Hunt will on Thursday sign a financial services deal with Switzerland, claiming it will make it easier for financial firms and wealthy individuals in the two markets to do business with each other.
The UK-Swiss deal is based on the mutual recognition of each other’s regulatory regimes and is intended to bolster the City of London in a post-Brexit era.
Hunt will claim on a visit to Bern that the agreement was made possible by Brexit allowing Britain to strike its own deals with major financial centres.
“The Bern Financial Services Agreement is only possible due to new freedoms granted to the UK following its exit from the EU,” the Treasury said. “The agreement will enhance the UK and Switzerland’s already thriving financial services relationship.”
Negotiations with Switzerland on a mutual recognition deal were launched by Rishi Sunak when he was chancellor in 2020. He claimed that a deal would demonstrate a shared vision of an “open, global and free” economy.
Hunt will sign the agreement with his Swiss counterpart Karin Keller-Sutter in Bern, mutually recognising each other’s domestic laws and regulations on financial services.
The Treasury said the agreement would make it easier for corporate and wealthy clients in the two markets to do business with each other.
It added: “This relationship is underpinned by a commitment to international standards and a shared belief in the value of open and resilient financial markets.”
David Henig, UK director at the European Centre for International Political Economy, said the deal was “broadly good news” and exploited Britain’s global weight in financial services.
“We aren’t going to be setting the rules in cars or artificial intelligence but in financial services we do have some influence,” he said.
He added that if Britain was still a member of the EU it would have enjoyed regulatory “equivalence” deals with Switzerland but Hunt’s agreement with the Swiss could potentially be better.
“We haven’t seen the details yet, but this is probably better than the equivalence framework with the EU,” he said.
Senior insurance industry figures said the sector has made a renewed push to ease trading between the two countries’ specialist insurance markets, where big assets such as planes and pipelines are insured by a range of global firms.
The UK’s market is centred on Lloyd’s of London, which is a hub for negotiation of these policies, while Switzerland is host to big insurance and reinsurance groups such as Zurich and Swiss Re. The two countries signed an agreement in 2019 that allowed firms to sell more easily into each other’s jurisdiction.
A person familiar with Hunt’s agreement said it would exempt London-based insurance brokers from new rules that would have forced them to set up a branch in Switzerland in order to place their clients’ risks with local insurers. This would avoid significant extra cost and complexity, the person said.
The Treasury said that between 2016 and 2022, UK trade in financial and insurance services with Switzerland grew by 53 per cent — reaching £3.28bn in 2022.
Meanwhile, the UK is also seeking an enhanced trade agreement with Switzerland covering the full range of trade between the two countries.
