Independent Scotland's FIAT currency - when should I move my savings?

lr1277

I suppose it is possible that so many customers move their money from Scottish to rUK institutions that rUK institutions may reduce their rates for savers and Scottish institutions may have to increase their rates to keep providing loans etc.


So reduced rates in rUK but confidence/certainty OR
increased rates in Scotland but uncertainty.


I wonder if there will be sufficient capital movement to cause these changes.

colsten

For some considerable time there will be no discernable change as a result of a separation as iScotland would hang on to the BoE for as long as they possibly can. The BoE will not have different rates for different parts of the UK.

colsten

Mark Carney today: "..... a currency union is incompatible with sovereignty...."

http://www.youtube.com/watch?v=5Wabmm-g_eQ

lr1277

Whilst I agree the BoE won't have different rates for different parts of the country, even today banks and building societies have much higher rates for loans and lower rates for savings due to the competing influences of funding for lending and BoE telling institutions to build up their reserves.
So whilst BoE may have one rate, organisations' rates for savers and borrowers may move with the flow of money.

talexuser

rpc wrote: »

the SNP and Alex personally were campaigning for less regulation so that the "Scottish" banks could be more successful.

Not just that but before the crunch he is on record as saying that the then booming Ireland was exactly the model an independent Scotland should follow for better prosperity. As well as best friend of Fred the shred. :rotfl:
Mind you our Gideon said the same, but still, the idea that Salmond knows better is risible.

jimjames

colsten wrote: »

Mark Carney today: "..... a currency union is incompatible with sovereignty...."

http://www.youtube.com/watch?v=5Wabmm-g_eQ

I find it quite strange that the SNP want to have independence but want to share a currency and all that entails with monetary union and loss of control of policy.

Why do they not want to run their own monetary affairs? Or is it to avoid scaring voters?

Archi_Bald

3 possible explanations I can think of

1. Salmond knows that there is no way Scotland could afford to set up as a credible Lender Of Last Resort (not with with a banking industry 12 times the GDP. For comparison, Iceland's banking industry was "only" 7 times GDP). Therefore, he desperately wants to cling onto the safety provided by the BoE and by the UK government.
   
   
2. Salmond has a cunning, yet to be revealed, plan on how he would force the BoE, and an rUK government, to take scottish requirements into account when making monetary policy decisions
   
   
3. Salmond hasn't thought this through

The obvious answer is number 3.

CLAPTON

Archi_Bald wrote: »

3 possible explanations I can think of

1. Salmond knows that there is no way Scotland could afford to set up as a credible Lender Of Last Resort (not with with a banking industry 12 times the GDP. For comparison, Iceland's banking industry was "only" 7 times GDP). Therefore, he desperately wants to cling onto the safety provided by the BoE and by the UK government.
2. Salmond has a cunning, yet to be revealed, plan on how he would force the BoE, and an rUK government, to take scottish requirements into account when making monetary policy decisions
3. Salmond hasn't thought this through

The obvious answer is number 3.

or
The Scottish banking industry will be only a minute fraction of Scotland's GDP once most of it is moved to England (probably already has in real terms )

rpc

Archi_Bald wrote: »

3. Salmond hasn't thought this through
The obvious answer is number 3.

Or 4 - Salmond and the rest of them have thought this through, realise a currency union would be great for Scotland, also realise that a new currency would scare off voters so they are sticking to Plan A until a Yes vote at which time they can choose a sensible, but unpopular, plan B and blame it on evil Westminster.

Credit Suisse reckon (50% probability) it will be a pegged currency and that the peg will get broken. They also reckon Scotland is in for the mother of all recessions if it is a Yes to deal with the devaluation that will happen.

Reaper

I think almost certainly what will happen is what neither side is proposing - unofficially using sterling. However this would have disadvantages for Scotland such as being unable to print money to protects its banks, though some may say that's a good thing.