Referendum Answers

Short Answers to Popular Questions about Scottish Independence

Bailing out the Banks

Q. If we'd been independent, could we have afforded to rescue the banks?

A. Yes. Surprised?

The bailing out of the banks is often brought up by the glooms at Better Together as a reason why Scotland should stick with mummy UK. In other words, if something horrible happens, then we can rely on being part of the UK to save us.

But the reality, as is usual with the scary stories from Better Together, is not quite as it appears.

Barclays Bank, headquartered in London, England, was bailed out by the USA by £550bn. Why? Because the US was concerned about the risk to the US economy if Barclays went bankrupt because of the enormous amount of US debt that Barclays held. And not just Barclays. The US also made emergency funding of £285bn to another foreign bank - RBS.

And that's the thing about the global banking system. It's not where a bank's headquarters is that's important; it's where they do business that counts. According to international banking expert, Harvard professor Andrew Hughes-Hallet, Scotland's bail out of RBS, had we been independent, would have been around 10% of the UK's bail out of £65bn, so about £6.5bn. A lot of money certainly, but nothing that would have broken the Scottish economy as Alistair Darling would have you believe.

In fact, you might think that Alistair Darling has a bit of a cheek to be warning us of the dangers of another banking crisis, given that he was in charge when the last one happened. Because when we're independent we'll make damn sure that the banks' activities in Scotland are correctly regulated. So don't let the big numbers of the banks' bail-outs' from Better Together scare you, because that all they're designed to do - scare you into voting No.

Further Reading

Business for Scotland: Destroying the No Campaign's Bank Bail Out Lies