When the UK’s Brexit transition agreement with the EU expired this week, some €6 billion ($7 billion) of daily trading in EU stocks left London overnight for markets across the Channel. The question is whether this was a one-time hit or a sign that even bigger chunks of the financial sector will disappear.

Because financial services were largely left out of the Brexit agreement between London and Brussels, exchange operators in the UK can no longer provide trading in EU-listed stocks to European customers from Britain. Companies in the UK capital like London Stock Exchange Group, Cboe, and Aquis Exchange activated their venues for EU-shares on the Continent, where nearly all trading in EU stocks now takes place.

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It’s easy to overstate what has happened so far, which is mainly a change in legal designation. UK-based exchange operators have units in places like Paris and Amsterdam for this type of business, but the electronic buying and selling technically still happens in a data center in the UK. (As does the trading for Pan-European exchange Euronext.) Brits lost a dab of tax revenue and some pride, but at this point the country’s financial district is well intact.

“Banks and brokers did a lot of work to make sure they can continue trading as normal,” said Anish Puaar, an analyst at Rosenblatt Securities in London. “Instead of Cboe London it’s Cboe Amsterdam. That’s about it.”

Finance executives, however, are concerned it could be just the beginning.

“Losing your equities business for European trading, while it’s annoying, and embarrassing, it isn’t actually a huge part of the $60 billion trade surplus that exists today in the UK for financial services,” said Alasdair Haynes, founder and CEO of European stock exchange Aquis Exchange. “The worry is what happens with the next bits? And what are the next bits of the industry that start to move across?”

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Britain has two choices with big implications: officials can try to retain access to the EU market by keeping the UK’s rules and regulations closely in line with those of the European bloc. The hope would be that EU authorities would grant the UK “equivalence” and allow its companies to sell financial services to the single market.

The other choice is to be bold: the UK can forget equivalence, give up easy access to the EU’s single market, and go its own way, making full use of its capacity to make its own rules and regulations. But if the UK decides to diverge from the EU’s rules, that could spur officials in Paris and Frankfurt to rev up their efforts to strip as much financial-services business from Britain as possible.

Xavier Rolet, the former chief executive of the London Stock Exchange Group, doubts UK politicians will go the more ambitious route. For Rolet, a Frenchman who was also an executive at investment bank Lehman Brothers, the bottom line is that services account for about three-quarters of Britain’s economy, and Westminster doesn’t have a deal for services with the EU. He’s says that leaves the UK with little leverage.

“It will require a choice to go for broke in terms of regulatory and fiscal recalibration, which means that there will be no hope of maintaining access to EU markets,” he said. “I doubt that UK politicians will make that choice, and, in my view, I think they will be influenced and egged on by UK regulators to maintain equivalency.”

In Brexit talks, UK prime minister Boris Johnson prioritized the likes of goods and fishing, which are a relatively small part of the economy but a politically important symbol. Perhaps some officials think the financial sector has the means and sway to look after itself—or that it was politically dangerous to be seen siding with bankers. Either way, the bargaining chessboard for finance appears to favor Brussels at the moment. This week’s departure of EU stock trading to the Continent may have emboldened the EU. If it worked for stock trading, why not try it on some other lines of business?

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Some executives in London think this shows the UK can forget about negotiating equivalence and access to the single market—in which case Brits have had their decision made for them. And there are also signs, buried in documents only read by financial market wonks, that British regulators could indeed be preparing to go their separate way from their former colleagues in the EU of their own accord. Britain’s Financial Conduct Authority, for example, has suggested that it would rely on its own research, rather than the EU’s, when it comes to regulating dark pools. It could be that officials are testing the boundaries, or are planning something more radical.

Bank of England governor Andrew Bailey says the price of equivalence could be too high, and he suggested that the bloc’s decisions on whether to grant it were being driven by a goal to become more self-sufficient in banking and finance. He told parliament’s Treasury Committee this week that the UK can’t afford to accept the EU’s rules and regulations with no say in them, and that British regulators were already planning to diverge modestly. Bailey also noted that the UK has lost about 5,000 to 7,000 jobs in financial services since Brexit, which is far fewer than feared, although more could be eliminated in the coming months and years.

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If Britain tries to strike out on its own, some think the EU is almost certain to target the UK’s euro-derivatives clearing business. Whereas stock trading of EU company shares is a minor prize, the multi-trillion-dollar swaps market is about much more than just bragging rights. Handling such a titanic amount of derivatives is lucrative and brings with it an ecosystem of skilled jobs and financial expertise. EU politicians took aim at that business, which is a unit of London Stock Exchange Group, immediately after the Brexit referendum four years ago.

Rolet thinks the need to protect euro-clearing is why the UK will be reluctant to turn its back on the EU. “Many of the jobs are in financial infrastructure,” he said. “No matter the rhetoric, it will be difficult for the UK to diverge.”

The discussions underscore that London, a diverse, international city that voted against leaving the EU in 2016 that’s still the biggest financial center in Europe, is at a difficult crossroads. Despite the risks, Haynes thinks Britain has to plot a bold, risky course by moving even further away from the EU.

“Britain actually has just lost of the European trading of European shares,” Haynes said. “But that doesn’t kill London as a financial center. What Britain needs to do now is make it an environment to win more businesses, financial services and other businesses, to turn London into an entrepreneurial, low-tax, low-cost, high-standards country.”

The post London lost a chunk of European stock trading this week. What will it lose next? appeared first on Quartz.

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