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Banks exit plan raises stakes in Scotland

Thursday, September 11, 2014 - 02:05

The battle for the hearts and heads of the Scottish people takes a new turn with two British banks saying they will relocate to London if Scotland votes for independence. But will the announcement influence next week's referendum? Hayley Platt reports

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Both have their headquarters in Edinburgh. Both say they'll leave for England if voters choose an independent Scotland. And Lloyds Banking Group and Royal Bank of Scotland aren't the only lenders to confirm their intentions. Australian owned Clydesdale bank will head south too. Their decision to speak out follows polls earlier in the week suggesting support for the Yes campaign was growing. George Hay from Reuters Breakingviews says they needed to deal with the uncertainty over next week's referendum. SOUNDBITE: George Hay, Reuters Breakingviews, saying (English): "It's good for anyone who's a shareholder in RBS because it confirms that it will be backed by the lenders of last resort facilities of the Bank of England." RBS is 81 percent owned by the British government and Lloyds 25 percent state-owned. The bailouts costs more than £66 billion. Ratings agency Standard and Poors says an independent Scotland would never be able to support its banks if there were to be another financial crisis. Together they are worth more than 12 times Scotland's GDP. RBS and Lloyds make up half of that - and their customers may not relish the prospect of a move. SOUNDBITE: George Hay, Reuters Breakingviews, saying (English): "If you're a Scottish banking consumer and you go to a position from having a bank which is headquartered and domiciled in Edinburgh to basically your bank being part of a foreign country. And that raises all sorts of questions about what happens to your credit, the availability of it after a yes vote if that happens." The latest polls suggest the No's are just ahead, easing pressure on European shares and sterling. But the leader of the Yes campaign Alex Salmond remains positive. SOUNDBITE: Alex Salmond, Scotland's First Minister, saying (English): "I think the people of Scotland have moved beyond these warnings and scaremongerings. The No campaign is in terminal decline." If Scotland votes to leave the United Kingdom the banks will have 18 months to decide what action to take. But they hope by nailing their colours to the mast now they won't have too.

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Banks exit plan raises stakes in Scotland

Thursday, September 11, 2014 - 02:05