The report, Unlocking Growth Through a Stronger UK-EU Financial Services Partnership, urges both sides to place the sector on the agenda for the forthcoming Leaders’ Summit and within the wider political reset.

It argues that financial services are a critical enabler of growth, investment and economic resilience for businesses and consumers across both the UK and the EU.

Drawing on interviews with banks from the UK, EU and beyond, alongside embassy representatives, think tanks and trade associations, the report proposes a three-stage roadmap that begins with practical steps achievable now.

Over the next two years, it recommends shifting the joint Regulatory Forum from passive information sharing to active coordination, embedding financial services as a standing item at annual UK-EU summits, and securing long-term certainty through non-time-limited Central Counterparties equivalence and the removal of the sunset clause from the EU’s UK data adequacy decision.

For the medium term, the report calls for a mobility agreement for skilled professionals modelled on the UK-Swiss arrangement, action to close the gap left by the absence of an EU Capital Requirements Regulation equivalence decision, and a pragmatic, targeted approach to equivalence supported by a joint “competitiveness lab” and regulatory sandbox.

In the longer term, it envisages a UK-EU Financial Services Agreement inspired by the UK-Switzerland Berne arrangement, and ultimately a deeply integrated pan-European capital market spanning the UK, EU, EEA and EFTA.

Kerstin Mathias, director of International Affairs at UK Finance, said: “The UK and EU have a well-connected financial landscape, but our institutional relationship sits below its potential. The past decade has brought significant change, and with it an opportunity to enhance how the UK and the EU engage on financial services. 

“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.”

Emma Rachmaninov, Freshfields partner, said: “The UK and EU share many of the same goals and a commitment to the same international standards.

“In that context, 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, said: “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.

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