Swiss Launch Market Access Offensive Amid Brexit Opportunity

  • Swiss seeking treaties with Germany, France, Spain, Italy,U.K.
  • Government sets out its multi-year plan for financial industry

UBS headquarters in Zurich.

Photographer: Matthew Lloyd/Bloomberg

Switzerland announced a diplomatic offensive to open national borders to its banks and asset managers, calling Britain’s vote to leave the European Union an opportunity for the Continent’s largest financial center.

The country of more than 250 banks, including UBS Group AG and Credit Suisse Group AG, will seek to negotiate agreements with nations that have significant potential or are already of great importance for the Swiss financial center, the government said Thursday in a report setting out its goals for the industry. It listed Germany, the U.K., France, Italy and Spain as among countries considered a priority for market-access treaties.

“Although the financial centers of Switzerland and the U.K. are closely linked, they also compete against each other,” the report said. “While asset management and investment banking are well-established strengths of London’s financial center and are likely to remain so, Switzerland can build on its strong position in the area of cross-border asset management.”

The government also plans to seek EU acceptance of Swiss regulations and supervision in areas including investor services, trading platforms, funds and derivatives trading. To that end, the Swiss secretary for international financial matters will intensify talks with EU institutions and key countries, the government said.

New Offensive

In other positions announced Thursday, the government pledged to remove barriers for technology companies and, in a nod to a frequent complaint from the industry, conduct comprehensive studies of the economic impact of regulation. Since its last policy update in 2012, Switzerland has focused on making its banks safer, adapting its financial regulations to those in the EU and dealing with an international crackdown on tax evasion.

“In the past years, we were under pressure and sometimes on the defensive,” Swiss Finance Minister Ueli Maurer said at a news conference in Bern. “We are going from the defensive to the offensive.”

The U.K. vote in June to leave the EU brought new urgency to the question of market access for non-EU countries including Switzerland and the U.S., as many of their companies sell financial products through London. Switzerland hosts the region’s biggest financial center after London.

“It’s particularly noteworthy that the government for the first time makes a commitment to a better promotion of the financial center abroad together with the industry,” the Swiss Bankers Association said in an e-mailed statement. The sector contributes 13 percent to the economy, including indirect effects, and boasts the largest share of the cross-border wealth-management market, according to the SBA, the main industry group.

Brexit Impact

Brexit threw into question the future ability of Swiss firms including UBS and Credit Suisse to use London as a gateway to the EU for activities such as investment banking. Unlike the financial hubs of Dublin or Frankfurt, Switzerland cannot offer all the benefits of so-called passporting because it lacks a comprehensive financial services agreement with the bloc.

Switzerland hit a road block in negotiations with the EU on a range of topics when it voted in a 2014 referendum to limit immigration in violation of the bloc’s principle of free movement of people. This has also made a wholesale agreement for the financial sector with the EU less likely.

“The British referendum was also negative for the negotiations between the EU and Switzerland,” the secretary for international financial matters said in a statement. “The Swiss dossier has become less of a priority. ”

“An advantage of Brexit is that we will hopefully gain a good partner outside the EU with a similar stance regarding open markets and a similar regulatory philosophy.”

— With assistance by Mara Bernath

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