Breakingviews

Scots’ no to independence still leaves UK in limbo

September 19, 2014

The roughly 55:45 vote against secession in a landmark referendum reduces many risks: financial instability, a UK exit from Europe and a sharp fall in trade. But the bribe to no-voters of more devolved powers creates other dangers – including a weakening of the union.

Applying corporate finance to nations

September 16, 2014

Breakups and spinoffs generally make public companies run better, become more accountable and deliver greater value to their constituents. As Scotland prepares for a historic vote on independence, it’s worth considering whether the same logic might also be valid for governments.

Calculator: Does Scoxit = Brexit?

By Hugo Dixon
September 12, 2014

If Scotland votes for independence, one of the knock-on effects could be on Britain’s membership of the European Union. This calculator quantifies the political risks posed by the Scottish referendum for the UK in Europe.

RBS/Lloyds moving plans leave key questions opaque

September 11, 2014

Relocating Edinburgh’s two big banks to London would eliminate the risk of potential bailouts for an independent Scotland. But it creates crucial uncertainties over credit availability and cost for Scottish consumers. They deserve answers before they vote – and won’t get them.

RBS puts lipstick on Citizens for $14 bln IPO

September 8, 2014

The Scottish bank reckons cost cuts, rising interest rates, capital returns and more business will boost its poorly performing U.S. unit. Granted, all this might create decent enough returns to justify the price. But RBS is painting too pretty a picture of Citizens’ independence.

Sterling fall shows rational alarm over Scotland

By Edward Hadas
September 8, 2014

The poll lead for Scottish independence may be unreliable, but the decline of the pound – now down 6 pct since July – prices in the realistic risk of trouble. A UK breakup would be fraught, the fiscal and economic damage significant, and the loss of European status definitive.

Scottish secessionists in bind over North Sea oil

September 4, 2014

Both sides of the independence debate are arguing over how many barrels are left. Oil revenue is key for an independent Scotland to manage its finances. But the need to raise funds could undermine an equally vital imperative: tax breaks to incentivise flagging exploration.

Can sterling hit $2? Only with a perfect storm

June 18, 2014

Having touched $1.70, the pound is on the brink of escaping its five-year range. A return to $2 looks like a fantasy right now. But a more hawkish BoE, a dovish Fed, a Scottish “No” to independence, and a narrowing of the UK’s twin deficits would do a lot to close the reality gap.

The morning after Scotland votes for independence

May 29, 2014

Most analysts have assumed Scots vote No in September’s referendum, but Yes-voters are gaining ground. If they prevail, critical questions that are currently completely up in the air will need to be answered rapidly. The most pressing one will be: who bails out Scottish banks?

Scots aim to break Europe’s working currency union

July 10, 2012

Europe does have a successful currency, fiscal and banking union - in the United Kingdom. Scottish nationalists want to go backwards, towards the weaknesses of the euro zone. In Edinburgh as in Brussels, it’s dangerous to let politics get the better of financial reality.