Riskier than Iceland: agency rates future for independent Scotland’s banks

Now we have to worry about an independent Scotland’s banking system melting down?

The Guardian discusses an S&P report labelling banking regulations in an independent Scotland ‘challenging?’

“An independent Scotland would need the support of the UK Treasury and the Bank of England to prevent savers in its banks being as vulnerable as those who had money in Iceland during the 2008 financial crisis, according to one of the three leading credit rating agencies.

In a detailed analysis of where the Scottish banking system would stand after a yes vote, Standard & Poor’s concluded it would be “challenging” for a government in Edinburgh to support its banks without the backing of London because their assets would be 12 times as big as the country’s output – far higher even than Iceland’s banks before their crash.

Although the Conservatives, Labour and the Liberal Democrats have insisted that Scotland will have to go it alone if it votes yes in September’s referendum, the ratings agency said it would be very difficult for Scottish banks if this were the case. At the time of the crash, Brussels obliged all EU countries to guarantee €100,000 – or £85,000 – of a saver’s money in the event of a bank collapse.”

Wales doesn’t even have a central bank yet is talking about doing the same thing? Yikes!

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