Financial services

The financial services sector plays a critical role in the modern economy. The bundle of institutions that make up an economy’s financial system  provide critical functions, such as facilitating transactions (exchange of goods and services), mobilizing savings, allocating capital funds (notably to finance productive investment), monitoring firms and managers (so that the funds allocated are spent as envisaged), and mitigating risk (reducing risk through aggregation and enabling it to be carried by those more willing to bear it).  Opening the financial sector to foreign participation and competition not only expands the availability of financial services to local consumers – individuals and companies – but may also help bring down the cost of these services and improve the performance of these critical functions.

The sector includes all insurance and insurance-related services (e.g. life and non-life insurance, reinsurance, insurance brokerage and agency, actuarial services, risk assessment and claim settlement services). It also covers all banking and other financial services (e.g. deposit-taking; lending of all types; financial leasing; payment and money transmission services; securities trading; securities underwriting; money broking; asset management, including pension fund management; custodial, depository and trust services; settlement and clearing services for financial assets and negotiable instruments; provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and advisory, intermediation and other auxiliary financial services, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy).

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Relevant provisions 

Principles of trade in financial services are contained, as for all services, in the General Agreement on Trade in Services (GATS). Additionally, an Annex to the GATS contains specific provisions applicable to trade in financial services. This deals with such issues as sectoral definitions, services supplied in the exercise of governmental authority, and prudential measures.

Additionally, a number of WTO members have made commitments in accordance with the Understanding on Commitments in Financial Services. The ‘Understanding’ is an optional and alternative approach to making specific commitments on financial services. It is not part of the GATS, but it was appended to the Final Act of the Uruguay Round.

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Committee on Trade in Financial Services 

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  • Minutes of the meetings of the Committee on Trade in Financial Services (Document code S/FIN/M/*)  > search   > help


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Uruguay Round and Post-Uruguay Round negotiations in financial services 

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Current commitments and exemptions 

Financial services is one of the sectors where the number of WTO members with specific commitments is the highest – second only to tourism services. As of end-2020, 111 WTO members (counting the EU-25 as one(1)) had undertaken specific commitments in at least one type of financial service – 43 had made commitments on the whole range of insurance, banking and other financial services.

For consolidated information on members’ commitments and exemptions on financial services go to the services database. If you are seeking the commitments of a specific WTO member, go to “Jump to a specific sector for a given Member”, select financial services from the sector dropdown list, select the member of interest and click “go”. To see a table showing which members have made commitments in financial services choose “See which Members have made commitments in a specific sector”, select Financial services and click “go”.

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Treatment of the sector in negotiations

Financial services were included in the services negotiations which began in January 2000.

Negotiating proposals on financial services were submitted by Australia, Canada, Colombia, Cuba, the EU, Korea, Switzerland and the United States. Additionally, some services proposals covering various sectors also include a section on financial services (Kenya, Japan and Norway).
  • Developments in the negotiations

The negotiations on financial services, as on other services sectors, have gone through various stages since 2000. In line with the GATS mandate (Article XIX), services negotiations were launched in 2000. Several negotiating proposals were submitted in this early phase, highlighting negotiating objectives and the concerns of members.

The Doha Ministerial Declaration of 2001 set timelines for the submission of requests and offers, with clear dates for the submission of bilateral requests (end June 2002) and initial offers (end March 2003). Interested members started to meet in so-called ‘friends groups’, including the ‘Friends of Financial Services’.

In the lead-up to the Hong Kong Ministerial Conference (December 2005), a joint statement on the liberalization of financial services was circulated by Australia, Bahrain, Canada, the European Union, Japan, Norway, Oman, Panama, Singapore, Switzerland, Chinese Taipei and the United States (TN/S/W/43).

The joint statement underscored the importance of opening the sector to foreign competition. It called for further improvements in members' schedules of commitments, notably by ensuring the right to establish new and acquire existing companies, and in the form of wholly-owned subsidiaries, joint ventures or branches (mode 3). It also called for the adoption of appropriate commitments on both mode 1 (services supplied from one country to another) and mode 2 (consumers moving abroad to consume services), removing national treatment limitations, and eliminating other non-discriminatory limitations (such as monopolies, numerical quotas or economic needs tests and mandatory cessions). In addition, the statement called for consideration of additional commitments on transparency in development and application of laws and regulations, transparent and speedy licensing procedures, and on other regulatory issues. 

Members identified their key negotiating objectives for financial services in the run-up to the Hong Kong Ministerial Conference. As described in document TN/S/23, those objectives included the following:

Scope of commitments (sectoral or modal)

  • commitments on “commercial presence” by a foreign company (mode 3) for all financial services
  • commitments on mode 1 (services supplied from one country to another) and mode 2 (consumers or firms making use of a service in another country) in appropriate sub-sectors (e.g. financial services addressed to sophisticated customers, such as reinsurance, asset management, and securities; marine and energy insurance services; provision and transfer of financial information and financial data processing)

Limitations and discrimination

  • limitations on the right to establish new companies and to acquire existing companies
  • limitations on legal form
  • limitations on foreign ownership (i.e. freedom to establish in the form of wholly-owned subsidiaries, joint ventures or branches)
  • non-discriminatory limitations, such as monopolies, numerical quotas or economic needs tests (ENTs — a test using economic criteria to decide whether the entry into the market of a foreign firm is warranted) and mandatory cessions
  • discrimination in the application of laws and regulations

Regulatory issues and additional commitments for negotiation

  • transparency in the development and application of laws and regulations, transparent and speedy licensing procedures

Scheduling issues to be addressed

  • use of the definitions in the GATS Annex on Financial Services

The Hong Kong Ministerial Conference in December 2005 provided new momentum to the services negotiations. Clear objectives for services negotiations were established in Annex C of the Ministerial Declaration, with the submission of plurilateral requests allowed by February 2006 and revised offers by mid-2006.

Similar to other services sectors, a number of WTO members prepared a plurilateral request on financial services and communicated this to a group of approximately 20 members.  The main objectives of the request included the following: mode 3 commitments to provide rights to establish new companies and acquire existing companies; commitments on modes 1 and 2 in a defined list of sub-sectors; the removal of key national treatment limitations; and the need for transparency in the development and application of laws and regulations relevant to the financial services sector (TN/S/M/19, paragraph 54).

Since negotiations were temporarily suspended in July 2006, no members have submitted a second revised offer as foreseen in the Hong Kong Ministerial Declaration. In total, 71 offers (initial and revised) were submitted, representing 95 members. Almost half of them contain improvements to financial services commitments. However, the proposed improvements offered less openness than that provided by regulatory frameworks already in place (see TN/S/20, paragraphs 46 to 48).

For an assessment of the plurilateral negotiations in various sectors and areas, consult the Report by the Chair of the Special Session of the Council for Trade in Services to the Trade Negotiations Committee in 2011 (TN/S/36).

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Additional information and background studies  

Additional information

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  • Official documents on financial services (Document code S/FIN/*)  > search   > help
  • Secretariat background notes on financial services (Document code S/C/W/* and keyword “financial Services and Background Note”)  > search   > help

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Background studies


WTO documents

  • WTO Secretariat background paper (2016) on Recent Developments in International Standard Setting Bodies S/FIN/W/90 and S/FIN/W/90/Add.1
  • WTO Secretariat background paper (2016) on Barriers to Financial Inclusion and Trade in Services S/FIN/W/88/Add.1
  • WTO Secretariat background paper (2014) on Financial Inclusion and the GATS S/FIN/W/88
  • WTO Secretariat background paper (2011) on Trade in Financial Services and Development S/FIN/W/76
  • WTO Secretariat background paper (2010) on the Impact of Technological Developments on Regulatory and Compliance Aspects of Banking and Other Financial Services under the GATS S/FIN/W/74
  • WTO Secretariat background paper (2010) on Financial Services S/FIN/W/73 and S/FIN/W/73/Corr.1
  • WTO Secretariat background paper (1998) on Financial Services S/C/W/72
  • WTO Secretariat study on financial services (1997): Opening Markets in Financial Services and the Role of the GATS.
  • Press release on the study

Studies by WTO staff (authored or co-authored)

Borchert, Ingo, Joscelyn Magdeleine, Juan A. Marchetti, Aaditya Mattoo (2020), "The Evolution of Services Trade Policy since the Great Recession", WTO Staff Working Paper ERSD-2020-02 (20 February 2020).
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Marchetti, Juan A. (2016), "The International Banking Landscape: Developments, Drivers, and Potential Implications", in Asli Demirgüç-Kunt, Douglas D Evanoff and George G Kaufman (eds.) The Future of Large, Internationally Active Banks (World Scientific Studies in International Economics, Volume 55), 2016.

Marchetti, Juan A. (2015), "Technical Standards for Financial Services and the GATS: An Exploration of the Issues", in Panagiotis Delimatsis (editor), International Standardization, Marrying Public and Private, Global and Local, Law and Economics (Cambridge University Press), 2015.

Marchetti, Juan A., Michele Ruta and Robert The (2014), "Trade Imbalances and Multilateral Trade Cooperation", in Thomas Cottier, Rosa M. Lastra, Christian Tietje, and Lucia Satragno (eds.) The Rule of Law in Monetary Affairs, Cambridge University Press, 2014.

Claessens, Stijn and Juan A. Marchetti (2013), "Global Banking Regroups", Finance & Development, December 2013, Vol. 50, No. 4.

Marchetti, Juan A. (2011), "The GATS Prudential Carve-out", in Panagiotis Delimatsis and Nils Herger (eds), Financial Regulation at the Crossroads – Implications for Supervision, Institutional Design and Trade (Alphen aan den Rijn: Kluwer Law International), 2011.

Barth, James, Juan A. Marchetti, Daniel Nolle, and W. Sawangngoenyuang (2010), “WTO Commitments vs. Reported Practices on Foreign Bank Entry and Regulation: A Cross-Country Analysis”, forthcoming “Oxford Handbook of Banking”, edited by Allen Berger, Phil Molyneux, and John O.S. Wilson.

Barth, James, Juan A. Marchetti, Daniel Nolle, and W. Sawangngoenyuang (2006), “Foreign Banking: Do Countries’ WTO Commitments Match Actual Practices?”, WTO Staff Working Paper ERSD 2006-11 (October 2006).
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Kono, Masamichi and Ludger Schuknecht (1998), “Financial Services Trade, Capital Flows and Financial Stability”, WTO Staff Working Paper No. ERAD-98-12, World Trade Organization.
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Mattoo, Aaditya (1999), “Financial Services and the WTO: Liberalization in the Developing and Transition Economies”, WTO Staff Working Paper No. TISD9803 (March 1998), World Trade Organization.

Roy, Martin, Juan A. Marchetti, and Aik Hoe Lim (2006), “Services Liberalization in the New Generation of Preferential Trade Agreements (PTAs): How Much Further than the GATS?”, WTO Staff Working Paper No. ERSD-2006-07 (September 2006), World Trade Organization. See the discussion on financial services liberalization in PTAs.
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Some useful links and other resources

Links to other international organizations that deal with financial services:


Other reports or studies

World Bank (2018), Global Financial Development Report 2017/2018: Bankers without Borders.

World Economic Forum (2018), "Addressing E-Payment Challenges in Global E-Commerce", White Paper.

De Haas, Ralph and Neeltje van Horen (2016), "Recent Trends in Cross-Border Banking", in The Palgrave Handbook of European Banking, Beck, Thorsten and Barbara Casu (eds), Palgrave

Rouzet, D., et al. (2014), "Services Trade Restrictiveness Index (STRI): Financial Services", OECD Trade Policy Papers, No. 175, OECD Publishing, Paris

Claessens, Stijn and Neeltje van Horen (2013), "Impact of Foreign Banks", in Journal of Financial Perspectives, 1(1), 1-18, 2013.

Stephanou, Constantinos (2008), "Liberalization of Trade in Financial Services : Lessons from Latin America and the Caribbean", Trade issues in East Asia. World Bank.

Van Horen, Neeltje (2007) "Foreign Banking in Developing Countries; Origin Matters", in Emerging Markets Review, 8(2), 81-105, 2007


  1. The schedule of specific commitments currently in force for the European Union is that of the EU-25, that is including those that were members of the EU in 2006: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom. Back to text