Mon, 05 Dec 2022

EDINBURGH, Scotland - Douglas Flint, the chairman of HSBC, the second-largest bank in the world, has warned that uncertainty over an independent Scotland's currency could lead to "capital flight" from the country.

Douglas Flint, in an opinion piece for The Telegraph, said supporters of independence were "advocating a giant step into economic uncertainty". Flint wrote that Scotland would struggle to derive the same anchor of financial stability that it gets from the sterling currency union, adding that alternatives to a currency union are unfavourable.

According to Flint, who himself is a Scotsman, the adoption of an independent currency or the joining of the Eurozone would create an unstable transitional phase during which capital flight would severely undermine the stability of the country's financial system.

"That is why the pro-independence campaign would like to recreate a currency union in the event that Scotland separates from the rest of the UK," he wrote. "If there was a better alternative that improved the future prospects of Scotland it would surely have been promoted vigorously."

Yes Scotland, the lobby group behind the calls for a referendum on independence, argues that a currency union is in the interests of Scotland and the UK, and will be agreed, but London has indicated that it would not support a currency union with an independent Scotland.

Pro-Britain campaigners have pressed First Minister Alex Salmond to set out a "Plan B" in case the country cannot continue a currency union with the UK, but he has refused to do so, insisting that the UK government would negotiate a currency union as the alternative would cost them too much in export transactions.

An independent Scotland would be the UK's second-largest export market. Without a currency union, the cost of currency transaction would cost the UK economy around USD $600-million per year.

HSBC is the second largest bank in the world, but has just ten branches in Scotland. Flint is a vocal advocate for Scotland to remain in the UK and has donated more than USD $30,000 to the 'Better Together' campaign.

Sign up for Scotland News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!