| March 23
March 23 BlackRock Inc, the world's
largest money manager, warned that Scottish independence would
bring about "major uncertainties, costs and risks" in Britain,
becoming the latest company to join the debate on this year's
Scotland will vote on whether to end its 307-year union with
England in September.
The British government has been campaigning fiercely to keep
it intact, arguing that both countries are better off together,
while Scotland's nationalists believe a split would give them
the economic freedom to prosper.
"(A 'Yes' vote) would create risks for investors,
corporations, savers and the UK economy," BlackRock said in a
detailed report for professional clients, adding that investors
in gilts, banks, utilities and energy companies would be most
It said there could be limited pressure on gilt prices due
to the small probability of Scotland finding it difficult to
meet its obligations to England at some point in the future.
But weighing out the potential impact of independence on
gilts in four scenarios, BlackRock concluded that there would be
no material risk for Britain's debtholders unless Scotland
defaulted on its share of the liability.
BlackRock said independence would raise regulatory costs for
banks and insurers that would move employees to England to avoid
having to pay additional fees to a new Scottish regulator.
Major banks would also question whether or not Royal Bank of
Scotland should remain based in Scotland, BlackRock
said, as Britain's support to the bank since 2008 has totalled
more than 210 percent of Scotland's gross domestic product.
The New York-based investment manager highlighted the impact
of other major issues that had to be settled, including
Scotland's opening balance sheet, the division of its
hydrocarbon bounty, European Union membership, tax matters, and
choosing a currency.
Weighing the costs and benefits of Scotland's three currency
options, BlackRock ranked Scotland launching its own currency
above keeping the British pound or joining the euro.
BlackRock, which manages more than $4 trillion in assets,
said it expected Scotland's initial credit rating to possibly be
several notches below Britain's.
It added that credit investors would factor the uncertainty
of "volatile" North Sea oil revenue into yields and that it was
"probably unwise" to base fiscal spending on crudes that depend
so critically on energy prices, production volumes, costs and
"The current Scottish Government will be hard-pressed to
deliver many of its promised outcomes," the investment manager
said, adding that negotiations would likely drag beyond the 2016
BlackRock's concerns follow a string of warnings from fellow
financial services companies including RBS, Standard Life
and Barclays. The bosses of oil majors BP and
Royal Dutch Shell have also voiced arguments against
A poll published on Sunday showed that the number of Scots
ready to vote for independence rose to 39 percent, up 2
percentage points from a similar survey conducted last month.
The data added to evidence that the referendum on Sept. 18 could
be tighter than previously expected.
(Reporting by Richa Naidu in Bangalore and Simon Jessop.
Additional reporting by William James in London; Editing by