HSBC chief says Scottish independence could prompt capital flight
Uncertainty over sterling currency union risks ‘parlous finances’, warns Douglas Flint.
Uncertainty over Scotland’s currency arrangements could prompt capital flight from the country, leaving its financial system in a “parlous state”, the chairman of HSBC bank has warned.
Douglas Flint said the sterling currency union was the anchor from which Scotland derived its economic success and financial stability. Scottish-born Flint, chairman of Europe’s biggest bank, said in a column in the Daily Telegraph that the decision by three major political parties to rule out a currency union with an independent Scotland was “wholly consistent with the actions that have been taken in the aftermath of the financial crisis” and “with the knowledge gained from recent events in the eurozone”.
He added that the insistence by Scotland’s first minister, Alex Salmond, that Scotland would keep the pound in the event of a yes vote would expose Scotland if the country adopted sterling unilaterally without a currency agreement. He said: “Scotland would be faced with monetary policy implementation without representation – a very odd form of independence.”
He added: “At the extreme, uncertainty over Scotland’s currency arrangements could prompt capital flight from the country, leaving its financial system in a parlous state.”
The question of whether Scotland could keep the pound if it voted on 18 September to leave the UK has hampered independence campaigners. The British government has said no and the Bank of England governor, Mark Carney, has warned of difficulties in monetary union.
The Daily Telegraph also reported that more than 100 business leaders with Scottish operations were planning to sign a joint letter against a yes vote next month. Keith Cochrane, chief executive of the Glasgow-based FTSE 100 engineer Weir Group, is reportedly behind a move that has involved approaches to the chief executive of Shell and the chair of the Royal Mail. So far, companies including BP and Standard Life have spoken out against independence but there has been no coordinated push against a yes vote by Britain’s biggest companies.