What will happen to the banks, if Scotland will separate?
Stephen Morris, Bloomberg agency reports, in the form of questions and answers reflects on how the Scottish and British banks will continue to exist in the case of dividing the country.
results of Scottish Referendum
the world will know tomorrow morning. And if the proud
Scots will vote “yes”, then it’s serious
complicate future financial and credit
organizations on either side of the Scottish
whether the Bank of England will apply headed by Markom Karni any measures,
to prevent the flow of funds
from Scotland and to stop financial
panic in the event of a positive
if you believe David Bell, teacher
economy in one of the Scottish
universities, emergency scenario
will lie in the fact that the Bank of England
impose limits on the amounts that can be removed
customers during the day, or maybe even
to force the banks to close for one or
a few days. However, this is not the best
decision. The British central bank is still
It remains the last resort for
Scottish banks as long as no
separation. All parties
They want to avoid a collapse similar to
fall in Northern Rock Plc in 2007
year, when the panic was fueled by
that investors could not get
online access to their money. head
Bank of England Mark Karni said on
Last week, British MPs,
that the regulator will not work
indefinitely – it will act
as a last resort for the financial
organizations based in Scotland,
regardless of where the
the majority of their assets.
that will make the banks to ensure
smooth operation of ATMs and
their timely completion, when
some customers will rush to cash
former Deputy Governor of the Bank
England John GIVE said officials
will monitor the situation with ATMs,
and a sufficient amount of notes in them
will be monitored in the state
today, tomorrow and next week – will
Whether smoothly operate Internet banking?
Do any special preparation of banks
to ensure a smooth remote
client access to their accounts?
Managers Lloyds and RBS
stated that their online services
will be available 24 hours a day,
a representative of HSBC actions
Bank declined to comment.
how well protected client
Driving in the area of financial compensation
services in the UK to protect deposits
and deposits by a special program.
The Scottish Government says
that it would continue the program
It would provide a guarantee of deposits to those
the same amount as now united Britain.
Carney said that the Scottish deposits
be secured throughout the
RBS and Lloyds have
They expressed that they plan
to move their registered office in
England, when Scotland will vote for
independence. How much money they
it will lose?
loss for each of these banks can
reach 1 billion pounds, according to
analysts. Most of these costs
It occurs due to re-incarceration
contracts and the change of jurisdiction
tax and debt enforcement. well
possible that the bank will keep supporting
offices in Scotland and leave them part
operations, since it will be less
even if Scotland will vote for
unity of the country, there will be, and RBS
Lloyds to move towards
south of the border on the assumption that
independence movement again and again
raise your head?
most likely, these two reputable bank
are not infinite risk
uncertainty about the future
Scotland – sooner or later, they will translate
their permanent offices in London. About it
They say many analysts around
the world. The precedent has been created in, for example,
Canada ’70s, when the Bank of Montreal,
Royal Bank of Canada and Sun Life
Financial Inc. moved their
main offices in Toronto. At that moment, to
power a party of Quebec and arranged
a referendum on the division of the country in 1980
year. And then, in 1995 the proportion of those wishing
separate was less than supporters
unity of the country.
Do credit ratings will drop the leading
“Scottish Three” banks after the
an affirmative result of the vote?
How soon can this happen?
I have already spoken on the subject of that
“Yes” -golosovanie bring uncertainty
which hurt his credit rating.
This is already quite clearly expressed
Moody’s Investors Service
and Standard Poors. Lloyd’s also
cited similar reasons for
explain their contingency plans to
the UK office moved.
S P and
Moody’s downgraded and Lloyds, and
RBS on one or two points,
if they are held on an accessory
to Scotland (which is definitely going to be
in a lower group than the UK).
Will the banks have difficulty
access to large-scale funding?
This follows from the previous question.
Reducing the credit rating increase
short-term financing costs
banks. Therefore, to repay more
the high cost of credit to Scotland
banks will receive funding
through its subsidiaries based in the UK
– for example, RBS will
use channels NatWest.
will happen to the Scottish mortgage
Borrowers whose loans are denominated
to Scottish homeowners should
will reimburse denominated in
pounds in the new currency loans, ie
risk higher payout value
mortgage and, accordingly, non-payment
(After all, no one knows how it will move
this is the new currency against the pound).
The price of real estate has the potential to
fall to 17.5%, as business in general,
smoothly flows to the south of the island.
And another risk
for mortgage borrowers – local banks
simply reduce the issuance of mortgage
loans to strengthen their position,
because the support of the Bank of England
It is already lost.
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