Unlocking Growth Through a Stronger UK-EU Financial Services Partnership

On 8 June 2026, UK Finance in collaboration with Freshfields published a landmark new report exploring how the financial services sectors on both sides of the Channel have adapted since Brexit, and setting out a vision for deeper cooperation between the UK and EU going forward.

The report — Unlocking Growth Through a Stronger UK-EU Financial Services Partnership — draws on targeted research and interviews with a broad range of stakeholders, including UK, EU and international banks, think tanks, embassy representatives and trade associations. It was launched at a Freshfields-hosted event featuring a keynote address by Rachel Blake MP, Economic Secretary to the Treasury, as well as a panel discussion with senior representatives from Citibank, Banco Santander, the Dutch Banking Association and Flint Global and presentations by UK Finance and Freshfields highlighting the key proposals.

What the Report Covers

The report begins by documenting the scale and continued growth of UK-EU financial services interconnectedness. The UK exported £33.7bn in financial services to the EU in 2024 — around a third of its total financial services exports — while the EU exported €35.7bn to the UK. Both figures have grown by approximately 50% since 2015. More than 80% of European derivatives and FX trading takes place in the UK, and the UK accounts for around 40% of European asset management activity. Cross-border bank lending between the two markets remains substantial.

Against this backdrop, the report examines the costs of post-Brexit fragmentation — including duplicative compliance requirements, reduced liquidity, inefficient capital allocation, and higher interchange fees on cross-border card transactions, which impose direct costs on EU and UK businesses and consumers. It also considers the broader context: the huge amount of investment needed to fund the green, digital and security transitions, and the role that deeper UK-EU financial market integration could play in mobilising the private capital needed to address that investment gap. 

A Three-Stage Roadmap

The report's central contribution is a phased roadmap for increased UK-EU collaboration. The approach is designed to respect the regulatory autonomy and sovereignty of both parties, starting with steps that are achievable in the near term and building progressively toward more ambitious long-term goals.

Short-term proposals focus on maximising existing structures and providing greater certainty. These include: 

• making fuller use of the UK-EU Memorandum of Understanding on Financial Services Cooperation and expanding the role of the Joint EU-UK Financial Regulatory Forum from information-sharing toward active coordination on topics such as transaction reporting, consolidated tapes, digital finance and tokenisation
• embedding financial services as a standing item on the annual UK-EU Leaders' Summit agenda
• securing non-time-limited equivalence for UK central counterparties, whose current temporary recognition is set to expire in June 2028
• removing the sunset clause from the EU's data adequacy decision for the UK, which is currently set to last until the end of 2031
• formalising a "regulatory learning loop" for the systematic exchange of insights and lessons between the UK and the EU

Medium-term proposals address structural frictions and seek to deepen coordination to support efficiency and innovation. They include: 

• a UK-EU Services Mobility Agreement modelled on the current UK-Switzerland arrangement, to make cross-border service provision easier for skilled professionals
• a targeted equivalence decision under the EU’s Capital Requirements Regulation, addressing technical distortions that currently force EU banks to apply higher, less risk sensitive capital requirements to their exposures to UK institutions and on lending secured against UK property
• a pragmatic and targeted approach to equivalence in other areas such as the regulation of ESG ratings providers
• establishing a flexible cross-border collaboration mechanism combining a “competitiveness lab” and regulatory sandbox approach, enabling the UK and willing EU Member States to jointly design and pilot innovative financial services initiatives

Longer-term proposals include the following more transformative ambitions: 

• a bespoke UK-EU Financial Services Agreement modelled on the UK-Switzerland Berne Financial Services Agreement, seeking outcomes-based mutual recognition rather than rule-by-rule alignment
• a Pan-European Capital Markets Union spanning the UK, EU, EEA and EFTA nations, built on interoperable markets and mutual recognition frameworks

The message of the report is simple: by working together, the UK and EU can shape global standards more effectively, amplify their collective influence in a highly mobile and competitive sector, and build a financial ecosystem that is stronger, more innovative and better equipped to support Europe’s long-term prosperity.

Read the Report

The full report is available here. Members of the Freshfields financial regulatory team would be happy to discuss the proposals and their implications for your business.