Direct access for the UK's financial sector to the European Union after Brexit is increasingly under threat, as political will for an industry deal fades and the bloc toughens requirements for recognising other countries' financial rules.
The EU is the biggest customer of the City of London, with financial services exports worth £26bn in 2017. Ensuring the UK's large financial industry could still operate across the bloc from its home base was one of the central issues during early divorce talks after Britain voted to leave the EU in June 2016.
But as the EU and Britain quashed the industry's hopes of largely unfettered access to the bloc, banks began moving around a trillion pounds of assets from London to new EU hubs, while trading worth around €240bn a day in eurozone government bonds has moved to Milan and Amsterdam.
Despite the preparations, maintaining direct access would mean the sector could continue to leverage cross-border efficiencies of scale and avoid passing on the costs to customers of maintaining two hubs, one in Britain, the other in the EU.
Any access would be through equivalence, whereby the EU deems Britain's rules to be aligned closely enough to its own, but Brexit has already prompted Brussels to toughen up such conditions.
"You can ask for whatever you like in equivalence, but the chance of the EU going down that line is zero until they decide they need it," said Sharon Bowles, a former chair of the European Parliament's Economic Affairs Committee.
Equivalence is used by firms much further afield in the United States, Singapore and Japan, but was never designed for a whole global financial centre on the EU's doorstep, and does not cover core financial activities like banking.
The preparations already undertaken by financial institutions in the wake of the political impasse have to some degree lessened the need for alignment, and some are keen to break free of what they consider restrictive rules.
UK insurance firms, for example, have long complained that EU capital rules are too inflexible, but despite pressure from lawmakers, the Bank of England has been loathe to make any unilateral changes while in the bloc.
"I think that City opinion is more divided than a year ago on the merits of equivalence because of the reality of what it will look like in practice," said Jonathan Herbst, global head of financial services at the Norton Rose Fulbright law firm.
Given that any future trade deal would likely be based on a series of compromises across sectors, a divided but well resourced financial sector may give Britain's finance ministry less incentive to push for full access to EU capital markets.