Scottish firms may shift bank accounts south of border: Deutsche Bank
Government should take steps to ensure a financially viable Scotland as there could be "capital flight" to the remaining UK if voters back independence, a leading investment bank has said.
Making an analysis of the financial implications of Scotland's potential independence, Deutsche Bank has said that issues over Scottish currency in the event of independence could prompt businesses to move their bank accounts south of the border.
In the 16-page analysis report, the bank said that the choice of currency would be one of the biggest issues that would likely affect markets, and the Scottish government would not be able to set controls on the amount of cash that people would be able to take out or bring in.
George Buckley, the author of the report, said, "The risk of capital flight following independence, or even following a Yes vote, may make a formal currency union difficult to sustain, just as was the case with the Czech/Slovak monetary union in the early 1990s, which lasted just six weeks before breaking down."
Buckley added that Scotland's failure to assume its share of the national debt and the risk of depreciation in a new Scottish currency could also prompt capital flight by nervous savers.
The period of negotiations between the September 18 referendum and Independence Day of March 24, 2016, will thus be crucial. The report underlined that successful independence negotiations would be in the interests of both - Scotland as well as the remaining UK.