By Huw Jones

LONDON (Reuters) – Euro derivatives clearing was shifting from London to Frankfurt, showing how ending a heavy reliance on Britain after Brexit is feasible, a senior Deutsche Boerse (DE:) official said on Monday.

By year’s end, the European Union will decide how to move clearing of euro-denominated swaps from London Stock Exchange’s LCH to Frankfurt. This account accounts for around 90% of all activity.

Philip Simons from Deutsche Boerse’s Eurex derivatives division, stated that it is not about whether liquidity moves but rather how much and when.

Daniel Maguire of LCH said that there has been very little improvement.

Britain would like to make its temporary authorization to open euro swaps for EU customers, which is valid until June 2019, permanent. Brussels claims the status quo cannot be sustained, but financial companies are against mandatory relocation.

Maguire claimed that LCH is already regulated directly by the EU’s securities watchdog ESMA.

Maguire claimed that forcing liquidity fragmentation will increase financial stability risk, rather than reduce it. He added that it would decrease choice and competition as well as leave EU customers with lower prices and fewer liquidity options.

Maguire stated that “the debate must move” and is moving to the topic of how the EU authorities can have an influence on global markets, and have a place at the table about how these are managed.

Emma West, EMEA head of futures & options at Bank of America (NYSE:), said being forced to close positions in London and reopen them elsewhere would cause some market disruption.

Bill Stenning is the head of British public affairs at French bank SocGen. He stated that access to Britain was necessary to provide a cost-effective, global service for customers, as 75% of euro swaps trade outside of Europe.

Stenning explained that the UK has many products not found in the EU.