Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Latest Breaking News
In reply to the discussion: RBS will leave Scotland if voters back independence [View all]Divernan
(15,480 posts)27. Iceland didn't honor its deposit insurance (like the FDIC);cost savers and creditors billions.
It's not simply a matter of letting the banks fail - it's the collapse of a nation's economy.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10782671/Independent-Scotland-has-parallels-with-Iceland-warns-SandP.html
Scotland could end up with a banking system much like that of Iceland on the eve of the financial crisis if it votes for independence, according to a warning from one of the worlds leading rating agencies.
Analysts at Standard & Poors have said an independent Scotland might lead to the creation of a financial system with eerie parallels to that of Iceland in 2008 when the tiny North Atlantic island was forced to allow all its major banks fail with the loss of billions of pounds of savers and creditors money.
In a report on the implications of independence for Scotland-based banks such as Lloyds Banking Group and Royal Bank of Scotland, S&P said the country was likely to face a situation in which the assets of its lenders were more than 10 times the size of its economy meaning it would be unable to credibly support them if a new crisis struck.
The report focuses on the likely deposit assurance arrangements post-independence and warns that even if Scotland were to join the euro any guarantee to protect the countrys savers would almost certainly fail.
These arrangements would likely be unfunded, leaving the comparatively very sizeable deposit bases of the largest Scottish banks backed with an implicit guarantee by the Scottish government. We note a possible parallel here with Iceland, where in 2008 the national deposit insurance scheme could not honour claims when the countrys outsized banking system failed, said S&P.
Edit history
Please sign in to view edit histories.
88 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
Well, no - BoS is a subsidiary of Lloyds, and Clydesdale said they'd do the same thing
muriel_volestrangler
Sep 2014
#46
It's complicated, but independence wouldn't mean any automatic loss
muriel_volestrangler
Sep 2014
#60
I don't know; I would have expected something like that for Lloyds and RBS
muriel_volestrangler
Sep 2014
#75
My point (and Lenomsky's, I think) is that splitting the Scottish and rUK business
muriel_volestrangler
Sep 2014
#80
Tremendous uncertainty re rights to North Sea Oil,membership in NATO/EU/UN, currency, etc.
Divernan
Sep 2014
#5
Change does bring uncertainty - a lot of it in this case. Tough to balance the fear of change
pampango
Sep 2014
#10
Good point. Norwegians have the freedom of movement, trade and work within Europe that
pampango
Sep 2014
#37
Scottish vote prompts demands for more independence for Wales, No. Ireland & England as well.
Divernan
Sep 2014
#13
Iceland didn't honor its deposit insurance (like the FDIC);cost savers and creditors billions.
Divernan
Sep 2014
#27
This is about the bank credit ratings and the need for all banks to keep reserves.
amandabeech
Sep 2014
#35
Well, imagine Texas decideds to secede. Ya think some corporations headquartered there might
Adrahil
Sep 2014
#55
I would say that stating their plans now in the event of a Yes vote is a good thing.
Nye Bevan
Sep 2014
#63