Royal Bank of Scotland and HBOS came within minutes of closing cashpoints and normal business operations, the Bank of England confirmed
Both were bailed out by the BOE !
The Royal Bank of Scotland plc, registered in Scotland no. 90312. Registered office: 36 St Andrew Square, Edinburgh, EH2 2YB
Bank of Scotland plc, Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ.
If Scotland had been independant then no bailout from BOE for scottish banks and both would have gone bust !
I wonder how Alex Salmond would have got over that one Huh?
Well maybe, but the fact of the matter is that had Scotland been independent when Royal Bank of Scotland and HBOS, both Scottish registered banks, went under, it would now be more bust that even Ireland and Iceland. As a likely member of the euro, there would also be no obvious path back to salvation. Assuming he had not already been defenestrated in the manner of Brian Cowen, Mr Salmond would by now be begging Westminster to restore the union.
Do the maths. It has cost the UK taxpayer £70bn to recapitalise the Scottish banks – this was no UK banking crisis, but a Scottish one – and the sums needed would undoubtedly have been a great deal larger had not taxpayers from the UK as a whole been standing behind the liabilities. Shared among a population of little more than half the size of London, that's £14,000 per head.
The idea that had the Scot Nats been in charge, these two banks would have been better regulated, is an interesting theory but also completely fanciful. The Edinburgh financial and political elite is if anything even more defined by cronyism than Dublin's. Puffed up with its own sense of self importance, the hubris would very probably have been worse still.
But let's for the moment take leave of the real world and assume the banking crisis never happened. Could Scotland feasibly go it alone? The bottom line is not without taking a huge hit to living standards and/or public services. During the election campaign, the Scottish Labour Party attempted to cost the SNP goal of quitting the UK and came to the conclusion that without major spending cuts and or tax increases, there would be an ongoing structural budget deficit of £14bn a year, equal to around £2,600 per head of population. Bang goes free university tuition and bang goes free prescriptions. And bang goes an awful lot more to boot.
Ah but the Scots have north sea oil, you say. Well yes, but the Labour Party calculation is after taking account of £4bn a year in North Sea tax revenues. Depending on where the line in the sea is drawn, it might be a bit higher than that, but unless you include fields which are unmistakedly in English waters, it's not going to close the deficit.
