The governor of the Bank of England told the Treasury select committee on Tuesday that RBS quitting an independent Scotland was “a distinct possibility”, although he said he didn’t want to “prejudge it”.
Mr Carney, who refused to be drawn on which way he thought Scotland should vote, said RBS would have to guarantee deposits held in England, which could affect its decision to move its headquarters from Edinburgh to south of the border.
But he said much depended on whether Scotland remained part of the EU in the event of independence.
Mr Carney added: “Under EU law, in the case that the bank were domiciled in Scotland, it would be the responsibility of the Scottish government.”
He added that the financial policy committee would also be duty-bound to speak up if it believed a currency union posed risks to the rest of the UK’s financial stability.
Last week, Alliance Trust also warned it may move its headquarters to England if Scotland voted yes in September’s referendum.
During the meeting, Mr Carney also pledged to carry out a root-and-branch review of how the BoE conducted market intelligence in light of the Forex debacle. He said the BoE would create a new deputy governor position with responsibility for markets and banking.
Meanwhile, a House of Lords EU subcommittee on economic and financial affairs heard last Tuesday that the UK’s £6trn shadow banking sector was positive for the financial services industry.
Giving evidence to the committee, Matthew Fell, director of competitive markets for the Confederation of British Industry, said the so-called shadow banking system was “an important alternative form of finance”, which spread risk, boosted competition and “kept the banks on their toes”.
The committee is investigating the scale, benefits and drawbacks of the parallel world of shadow banking, following European Commission proposals to regulate the sector last year.
Adviser view
Simon White, IFA at Edinburgh-based Whites Financial Management, said: “It’s unlikely to affect my business or clients directly but I imagine, from a financial perspective, it’s bad news as there would be less money in the Scottish financial system if RBS were to move south.”
