UK Finance calls for stronger UK-EU financial services partnership

UK Finance has published a new report setting out a roadmap for a closer UK-EU financial services relationship, arguing that deeper cooperation could help unlock growth, improve competitiveness and support Europe’s long-term investment needs.

Launched with a speech by UK Finance chair Bob Wigley, the report, Unlocking Growth Through a Stronger UK-EU Financial Services Partnership, comes ten years after the Brexit referendum and outlines a three-stage plan to strengthen cooperation between the UK and EU while respecting the regulatory autonomy of both jurisdictions.

The report argues that despite Brexit, the UK and EU remain part of a deeply interconnected financial ecosystem. In 2024, the UK exported £33.7bn of financial services to the EU, while the EU exported €35.7bn to the UK, with both figures having increased by more than 50% since the referendum.

UK Finance is calling on policymakers to place financial services at the heart of the wider political reset between the UK and EU and to make the sector a standing agenda item at future UK-EU Leaders’ Summits.

The report proposes a phased roadmap beginning with a series of practical short-term measures, including strengthening the existing UK-EU Memorandum of Understanding on financial services cooperation, embedding financial services discussions within annual UK-EU summits, securing permanent equivalence arrangements for central counterparties and removing uncertainty around data adequacy arrangements.

Medium-term recommendations include a new UK-EU mobility agreement for financial services professionals, targeted equivalence decisions to reduce regulatory friction and the creation of joint innovation and regulatory collaboration frameworks.

Looking further ahead, the report envisages a bespoke UK-EU Financial Services Agreement modelled on the UK’s agreement with Switzerland, alongside the longer-term ambition of a pan-European capital markets union encompassing the UK, EU, EEA and EFTA countries.

Kerstin Mathias, director of international affairs at UK Finance, said the current institutional relationship between the UK and EU did not fully reflect the reality of an interconnected financial marketplace.

“The UK and EU have a well-connected financial landscape, but our institutional relationship sits below its potential,” she said.

“This is not a call for reintegration into the Single Market – the EU is a sophisticated bloc pursuing its own ambitious agenda and the UK, likewise, has its own regulatory framework, policy priorities and global commitments. But the two highly connected economies can achieve more where we cooperate. The question is not whether to work together, but how to do so more effectively.”

The report argues that closer cooperation would help both sides address significant investment challenges, including funding the green transition, digital transformation, infrastructure development and defence spending.

Drawing on the findings of recent reports by Enrico Letta and Mario Draghi, UK Finance highlights estimates that the EU faces an annual investment gap of between €750bn and €800bn and argues that deeper capital market cooperation could help mobilise the private capital needed to meet those requirements.

Emma Rachmaninov, partner at Freshfields, which partnered with UK Finance on the report, said the proposals offered a practical route towards greater collaboration.

“The UK and EU share many of the same goals and a commitment to the same international standards,” she said.

“We’ve been delighted to work with UK Finance to consider how a phased pathway could lead towards increased UK-EU collaboration in financial services – building the foundation now and deepening the cooperation over time in areas that are of clear mutual benefit, whilst respecting the boundaries and sovereignty of both parties.”

Marsha de Cordova MP, co-chair of the UK-EU Parliamentary Partnership Assembly, also welcomed the report, describing it as an important contribution to discussions about strengthening economic cooperation between the UK and EU.

“The UK and EU share a strong economic partnership, and closer cooperation in financial services can help drive growth and unlock potential on both sides,” she said.

“This report makes an important contribution to that discussion, highlighting how deeper collaboration can deliver real benefits for business and our wider economies.”

The report concludes that a stronger UK-EU financial services partnership is not about reversing Brexit but about creating a more structured and strategic framework that enables both sides to support growth, innovation and competitiveness while addressing shared economic and geopolitical challenges.