Last year brought a noticeable pivot away from globally harmonized financial regulation. Political campaigns hostile to globalization and regulation proved victorious in the U.S. presidential election and the U.K.’s Brexit referendum.

The far-reaching effects of this pivot have not been fully considered. These mandates to prioritize national interests over international cooperation could cause a chain reaction of sorts. They risk igniting a vicious cycle of competitive deregulation and regulatory arbitrage in the financial services sector across multiple jurisdictions. Repeals of regulation in one country could attract banks from another, prompting other nations subsequently to enact their own competitive rollbacks, either to benefit from or not to lose institutions as a result of the corporate migration.

When this finishes, we could be left with deregulation not just in countries that opposed globalization. In the end, many of the reforms designed to protect the global financial system and leading global economies from future crises could be erased.

The brewing dispute between the U.K. and the European Union over how Brexit is implemented offers an illustration of how countries will move away from a regulatory footing and toward competing for international financial business.

U.K. Prime Minister Theresa May appears committed to a strong break from the EU, but she has made a thinly veiled threat that the U.K. may turn itself into a low-tax, low-regulation “Singapore-on-the-Thames” if the trade deal offered by the EU is not to her liking.

Other members of the EU are set to gain from the U.K.’s decision, as analysts predict an exodus of financial institutions and other businesses out of London. Brexit is testing the resolve of Europe’s firmly harmonized regulatory regime. In March, the Irish financial services minister complained that rival EU members were engaging in regulatory arbitrage, as Dublin lost out to Luxembourg to be the base for AIG’s post-Brexit Europe operations.

Meanwhile, newly elected French President Emmanuel Macron has supported plans to deregulate aspects of the French economy. The outcome of the German election for chancellor in September will reveal just how much momentum the deregulation movement is gaining in Europe. Chancellor Angela Merkel faces opposition from familiar far-right nationalist positions.

In the U.S., President Donald Trump and a Republican majority in Congress have wasted little time in trying to fulfill promises to slash regulations. The new administration has used executive actions to order a review the Dodd-Frank Act. Congressional Republicans have pushed the Financial Choice Act to roll back dozens of regulations and scale back supervisory oversight.

Trump’s “America First” slogan embodies the nationalist approach sweeping through countries that were once aligned on the need for global regulatory coordination. A movement away from international standards and best practices, especially voluntary ones, is the next logical casualty of regulatory arbitrage. The unexpected outcome of the U.S. election already caused the Basel Committee to delay Basel IV reforms. Even collaborative regulatory bodies within individual countries are experiencing attrition. The Financial Stability Oversight Council, created by Dodd-Frank, is facing increasing legal and executive pressure to reconsider its designation of SIFIs to be subjected to stricter regulatory requirements.

The G20 Summit, scheduled for July, will be a telling event as international economic leaders attempt to reconcile diverging approaches. Valdis Dombrovskis, vice president of the European Commission, recently warned that if the U.S. and EU fail to continue to collaborate on international financial governance, they run the risk of regulatory arbitrage and resurgent instability.

This year’s developments could have a significant influence over slowing or hastening the race to the bottom. Increased nationalist sentiments and fragmentation of global financial standards could erase the protections that took lawmakers, regulators and financial institutions nearly a decade to implement.