A few months ago Courier columnist John J Marshall questioned whether an independent Scotland would have been able to bail out RBS and HBOS during the financial crisis, citing figures which put the UK Treasury's total exposure to the banks at the thick end of one trillion pounds.
In a subsequent letter to the newspaper, Dundee MSP Joe FitzPatrick rebutted JJM's claim, stating that the Treasury itself said that eventually the transaction could in fact make a profit for the taxpayer, or at the very least the eventual loss would be minuscule compared to the headline bail-out figure.
Which seemed to miss the point a bit. Surely the issue was not so much the eventual outcome in terms of profit or loss to the taxpayer, rather it was the ability to finance the rescue in the first place that was in question - even the most financially illiterate UK citizen could have made a substantial profit on buying and selling a house during the last few decades, but raising the money to purchase the property in the first place would have been a different matter.
And recent support for this view comes in the form of leading economist Professor Andrew Hughes Hallet, who said in a radio interview that the burden of saving RBS and HBOS would have had to be shared, because both the banks have significant activities in England and elsewhere, and he went on to cite international precedents.
Which would seem eminently fair, but the fundamental point is surely that this undermines Mr FitzPatrick's argument, and despite any eventual profit the bail-out would have accrued to an independent Scotland using his analysis, undertaking the rescue in the first place would have been a problem.
Thus, to put it another way, an independent Scotland would have had to go cap in hand to the UK/England to save the banks. Which, of course, hardly lends support to the argument that Scotland is too small to be independent, because states large and small have had to helped out on occasion, such as the UK regarding its IMF loan in the 1970s, and Greece's rescue by its fellow EU members more recently.
But perhaps not surprising, then, that the SNP's press release on the professor's interview concentrates on matters other than the bank bail-out.
The people of Falkirk deserve better
26 minutes ago
2 comments:
Has anyone actually discerned how much of the banks' assets were actually Scottish? What I am saying is reallistically what would have been the bill for supporting the banks' assets in Scotland. Could an independent Scotland have afforded that?
Please remember the case of the Fortis bank which was jointly bailed out by the Dutch and Belgian governments. The Dutch did not have to carry wholly the can despite being a mainly Dutch bank hqd in the Netherlands.
Remember where the "H" from HBOS came from and who in reality aquired who in that so-called "merger". What I am saying is why do the Scottish nation have to take the rap for a bank much of whose original assets lay outside Scotland?
And lets not forget that RBS' NatWest is a mainly English bank.
I find it interesting that some try to pin the blame (and indeed the moral guilt) for the collapse of two commercial businesses hqd (in the case of HBOS nominally) in Scotland on the Scottish people and nation. The majoriy of whose shares no doubt were owned outwith Scotland.
We should bow our heads in shame and mutter "Darien". And give ourselves a national scourging.
On the other hand when BP was causing problems in the US earlier this year it was from the same people "BP is not British, half its shares are not British owned" and "how dare you attack the UK because of the mistakes of a company that bears nominally British name in the title - its an international business".
Er like HBOS and RBS being international and having Scotland in their name.
BP, a company which of course is based in the UK - and used to be partly owned by the UK government (and lets not get into what it got up to in Iran in the 1950s).
Er like HBOS and RBS were/are based in Scotland.
Are we Brits hanging their heads in shame over BP? Na, didn't think so.
I hear sheep saying "Four legs, two legs bad, four legs good, two legs better"
Paella for thought. If Santandar went bust (not so fanciful concerning rumours about Spanish banks a few months ago), would you want the government of Spain (one of the P.I.G.S.) owning a considerable chunk of the British retail finance sector or would you rather the UK government bailed out the UK end of Santandar - particularly as Spain might turn round and say only the Spanish side of the business is their problem.
Ah, nostrophobia.
Thanks for the lengthy reply Aberdonian, and apologies for the delay in responding.
I can't really disagree with your compelling arguments, and while I'm not really sure if you are disagreeing with me or making more general points, I did say that a joint-bail out would have been eminently fair.
However, the point of my post was essentially to get to the facts of the matter rather than the usual partisan based-comment which seems to comprise much of the debate on these matters.
For example, I wholly agree that UK-level regulatory shortcomings were instrumental in the near-meltdown of the banks, but on the other hand when Alex Salmond makes statements such as:
"With RBS and HBOS - two of the world's biggest banks - Scotland has global leaders today, tomorrow and for the long-term."
...only months before it all went belly-up, then apart from the obvious lack of foresight, if Mr Salmond wants to claim RBS and HBOS as Scotland's own, but if it's now pointed out that most of the banks' assets aren't Scottish, then for polemical reasons at least this kind of contradiction has to be pointed out.
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