What does the Switzerland-EU negotiating mandate mean for the Swiss financial centre?

The banking industry has been campaigning for several years in favour of improved access to the EU market for Swiss banking and securities services. The EU single market is a core market for the Swiss financial centre: banks in Switzerland manage assets totalling some CHF 900 billion¹ on behalf of EU clients, and tens of thousands of jobs depend on this cross-border business. These figures underscore just how important this business is for Switzerland. They also make it clear that demand for Swiss banking and securities services among investors in the EU remains strong.

While banks in the EU enjoy relatively easy access to the Swiss market compared with other countries, banks in Switzerland have only very limited access to the EU market, which is also subject to ever more restrictive regulation. The current rules limit cross-border activities to passive “reverse solicitation” – in other words, situations where EU clients seek out services exclusively on their own initiative.

With a view to making their products and services more exportable, banks in Switzerland are backing an institution-specific approach aimed at opening the EU market up to interested Swiss institutions by having them register with the EU supervisory authorities. This would prevent a situation in which every bank in Switzerland has to comply with the EU rules. The Federal Council acknowledged that the institution-specific approach is a viable solution in its draft Assessment of Swiss-EU relations dated 9 December 2022 (page 21). The SBA will now work to ensure that it is adopted in the dialogue on financial regulation as part of the negotiations with the EU.

¹ This figure is based on the SBA’s Banking Barometer 2023 as well as data supplied by Boston Consulting Group.