By Angela Haggerty
A speech from the Deputy Governor for financial stability at the Bank of England, Paul Tucker, has further undermined a UK Treasury paper on Scottish independence which warned Scotland would be economically vulnerable outside of the UK, according to SNP MP Stewart Hosie.
The SNP’s Treasury spokesman at Westminster said the speech – delivered to the ninth World Congress of the International Association of Restructuring, Insolvency and Bankruptcy on Monday – highlighted the value of cross-border cooperation and countered “scaremongering” tactics from Scottish Secretary Michael Moore.
“Timing is everything and the Treasury paper has been completely undermined by Mr Tucker’s speech today, which is all about the importance of cross-border cooperation in financial regulation in order to protect taxpayers,” said Mr Hosie. “While Michael Moore scaremongers in Edinburgh on behalf of the No campaign, Paul Tucker for the Bank of England reflects the reality at an international conference.”
In his speech, Mr Tucker outlined the importance of resolution in tackling the ‘too big to fail’ culture: “If you believe in an international financial system that is not only free but also safe, in shielding taxpayers from the risks in banking, and in shielding banking from politics, you will be committed to making a success of resolution.”
Mr Tucker went on to say coordination between global authorities was the key to stabilising financial systems in future.
“Over recent months there has been marked convergence in how the world’s key authorities plan to approach resolution, with a FDIC (USA)/Bank of England joint paper on resolution only one example of intensified cooperation.”
Commenting on European Commission plans to regulate the banks, he added: “Indeed, it is not an exaggeration to say that the EU’s Directive is the keystone to breaking the back of the ‘Too Big To Fail’ problem.”
The development was another blow to the anti-independence campaign following revelations from former Labour Chancellor of the Exchequer Denis Healey that Labour deliberately hid Scotland’s oil wealth to block any rise in Scottish nationalism during the 1970s.
Lord Healey told Holyrood Magazine that the current UK administration was “worried stiff” at the prospect of a yes vote in next year’s independence referendum and said Scotland could survive “perfectly well” on its own resources.
However, the Labour peer believed the rest of the UK would suffer if Scotland departed from the Union, indicating the coalition could employ similar tactics to that of his own party more than thirty years ago in an attempt to put Scots off a vote for independence.
The Treasury paper on Scottish independence, unveiled by Mr Moore in Edinburgh on Monday afternoon, claimed an independent Scotland would have “significant difficulties” ensuring financial protection for savers and pensioners should the country hit financial problems.
The report questioned the ability of an independent Scotland to set up its own equivalent of the UK Financial Services Compensation Scheme, which safeguards bank deposits of up to £85,000 should there be a crisis.
Responding, SNP Finance Minister John Swinney dismissed the report, saying the Treasury’s figures were unreliable.
“The Treasury’s creative accounting on behalf of the No campaign simply does not add up,” said Mr Swinney. “It does not reflect the reality of how financial services operate or stand up to expert scrutiny.
“Constructed on a triple-AAA credit rating that has since been shredded, this is just the latest attempt to attack an independent Scotland’s ability to be an economic success story.”