SNP want to keep the pound AND the BOE as a lender of last resort

Graham_Devon

Thankfully, the house of lords economic affairs committee have stated this is "fanciful".

However, John Sweeny, Scotlands finance minister is adamant if Scotland votes yes to independance, they want to:

A) Keep the pound
Keep influence over how the Bank of England is run
C) Use the Bank of England as the lender of last resort

"Arrangements should be clear before the referendum. But the proposal for the Scottish Government to exert some influence over the Bank of England, let alone the rest of the UK exchequer, is devoid of precedent and entirely fanciful."

What is the SNP doing? Dreaming!?

The committee also believe that Scottish voters do not currently have the information to base a proper vote on.

He added: “We do not take a position on whether voters should vote yes or no on 18 September 2014, but they deserve to cast their vote based on a proper understanding of the possible economic impact. At present they do not have the information to do so.”

http://www.telegraph.co.uk/news/uknews/scotland/scottish-politics/9983608/Peers-warn-that-SNP-plans-for-a-currency-union-are-fanciful.html

PaulF81

They can go !!!! themselves. Independence doesnt involve hanging on England's coat tails.

It involves no representation in Westminster.

No Barnett Formula Payments

No Stirling currency

Its own third world central bank with no come back to the BOE as lender of last resort.

No English Taxpayers Defence expenditure, closure of Faslayne and all (now remaining UK) armed forces bases to close and move south of the border.

No comeback to the UK if it all goes wrong, even if the likes of frankie boyle come back begging forgiveness and swear allegiance to the crown and the Conservative party.

Welcome to the third world Scotland.

Owain_Moneysaver

PaulF81 wrote: »

closure of Faslayne and all (now remaining UK) armed forces bases to close and move south of the border.

Not necessarily. The UK has maintained military facilities in other countries (and the USA maintains facilities in the UK) and that could continue.

They'd remain United Kingdom of England Wales and NI facilities though.

Or the United Kingdom of England Wales and NI could sell off the facilities to the highest bidder. There's nothing but the SNP's assumptions to say that they'd be handed over to Scotland for nothing.

Thrugelmir

Currency was brought up a while ago as being a major issue but was swept under the carpet.

Aim (of the SNP) was probably to join the EU originally. But given current feelings perhaps no longer a viable proposition.

Generali

Just to make the point, the lender of last resort needn't be a provider of bailouts. In fact it needn't be a state owned entity as the BoE provided this function for decades prior to Nationalisation.

The LOLR provides a money market function which is more about providing overnight liquidity and thus maintaining an orderly market. These overnight loans are secured against highly liquid assets.

Given the highly intertwined nature of the UK and Scottish banking systems, this is probably a wise move and TBH if the Scots are to keep the pound it would be hard to see who else should do this.

BobQ

PaulF81 wrote: »

They can go !!!! themselves. Independence doesnt involve hanging on England's coat tails.

It involves no representation in Westminster.

No Barnett Formula Payments

No Stirling currency

Its own third world central bank with no come back to the BOE as lender of last resort.

No English Taxpayers Defence expenditure, closure of Faslayne and all (now remaining UK) armed forces bases to close and move south of the border.

No comeback to the UK if it all goes wrong, even if the likes of frankie boyle come back begging forgiveness and swear allegiance to the crown and the Conservative party.

Welcome to the third world Scotland.

As Paul states (in his typical black and white way) there are many issues that have not been thought through. The SNP are taking a lot for granted at present in assuming that if their policy prevails they can choose what to keep and what not to.

But on so many of these issues the questions arise. Is it in our interests to maintain bases in a non-NATO country? Or to allow another nation to influence our central bank? We have always resisted influence by the ECB so why allow the Scottish Government to do it?

There are probably many similar issues that need to be resolved. For example will Scotland join Schenegen or remain in the Common Travel Area? A decision that could lead to border controls as we have with most of the rest of the EU?

purch

There is no reason why any separate Nation could not choose to have GBP as it"s currency and legal tender.

The BOE would HAVE to remain in control of the currency, and as lender of last resort and as the holder of reserves.

Allowing Banks in other countries to issue GBP notes would continue as it does now.

There is no reason however for any other nation who choose to use our currency to have any say in the operation of the currency by the Bank

OffGridLiving

It would be interesting to look at other countries that have divided in recent years to see how this will pan out financially for Scotland and the UK (of England, Wales and NI). While Yugoslavia is a model we wouldn't want to follow, Czechoslovakia seemed to manage it quite equably.

It does seem odd that major details like this have not been discussed and agreed, before the independence vote. As the committee correctly states, how can people vote if they don't really know what they are voting for?

sabretoothtigger

Of course they want the pound and also I think BOE, QE and other revenues, what is the alternative.
The horrors of balancing a budget that only spends fairly what the country can earn would at least half the scottish government estate

It would be interesting to look at other countries that have divided in recent years to see how this will pan out

south and north Sudan also centers round oil like this might to a lesser extent

There is no reason why any separate Nation could not choose to have GBP as it"s currency and legal tender.

Fiji used to hold the pound but then found it more realistic to track more local economies.
Outside of accounting magic tricks, Scotland would probably be better off trading in Euros or even dollars as its the bigger market for their main exports

Allowing Banks in other countries to issue GBP notes would continue as it does now.

We had british coins minted in Sydney & India of course that was when it was easily checked for quality and worth and based on something besides politics.
It wouldnt work now to let Scotland divide and then have a say

Generali

purch wrote: »

There is no reason why any separate Nation could not choose to have GBP as it"s currency and legal tender.

The BOE would HAVE to remain in control of the currency, and as lender of last resort and as the holder of reserves.

Allowing Banks in other countries to issue GBP notes would continue as it does now.

There is no reason however for any other nation who choose to use our currency to have any say in the operation of the currency by the Bank

The Fed Chairman (Volker?) once said, "It's our currency but it's your problem".

I suspect the first time there was a difference of opinion over operational or strategic direction the Scots would learn what that phrase means.

System

Scotland is going to be a thriving tiger economy surging ahead without any need for English support.
Are they serious - the Bank of ENGLAND in charge of their economy? I thought they wanted independence.