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Currency, Banking and Financial Services after the Scottish Referendum

Posted 10/09/2013

The report on the fifth of the British Academy (BA) and Royal Society of Edinburgh (RSE) events on Enlightening the Constitutional Debate has now been published.

On Wednesday 24th July 2013 the British Academy and the Royal Society of Edinburgh held a small forum, with invited experts, to discuss questions surrounding banking and financial services in the aftermath of the referendum on Scottish independence. Leading economists and senior policymakers from HM Treasury and the Scottish Government discussed the currency options available to an independent Scotland, the implications of that choice for the rest of the UK, and the knock-on implications for fiscal rules and financial regulation. The report is an unattributed summary of these discussions.

The forum was hosted and chaired by Professor Tim Besley CBE FBA, Professor of Economics and Political Science at the London School of Economics and Political Science.

A number of key messages arose from the discussion including:

•    Retaining Sterling as part of a formal monetary union is seen by many, including the Scottish Government, as the best option for Scotland, but there is a need for a more adequate understanding of the potential financial risks of a shared currency.

•    Questions about how UK debt should be handled would be a key part of any negotiations in the event of a ‘Yes’ vote.

•    Scottish voters voting in the forthcoming Referendum will be doing so in a situation of huge uncertainty, in which they do not have clear knowledge of the costs and benefits of the various potential outcomes.

Download Press Release and Report

The RSE will also be hosting a public event in January/February 2014 in Edinburgh covering these and related economic issues, for which a detailed list of speakers will be made available once they are all confirmed.


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