Financial Services

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See also: Banking, Financial Institutions, Pensions

FOR THE UNION FOR INDEPENDENCE
Effect on the Financial Services sector

The Weir Group-financed study by Oxford Economics concluded that Independence would particularly affect the financial services sector. [1]

Royal Bank of Scotland has warned that uncertainties arising from a ‘yes’ vote could “significantly impact” its credit ratings, while Lloyds Banking Group has said a vote for independence could increase compliance, operational and funding costs. In August, Standard & Poor’s, the credit agency, warned the credit ratings of Scottish insurers would be at risk if the country leaves the UK[2]
Mark Dampier, research director with Hargreaves Lansdown, the investment managers said

“Scottish companies though would seem to have the most to worry about as a yes vote does not give them their own currency and the uncertainty may well bring higher borrowing costs for them.”

Relocation of financial services institutions

Standard Life, one of the largest businesses in the Scottish financial sector, said in February 2014 that it had started registering companies in England in case it had to relocate some of its operations there[3]. This intention was re-stated in a statement released by the company on 10th September 2014[4]

References

  1. 1. Weir Group:Independence Report by Oxford Economics, which is a commercial venture with Oxford University’s business college to provide economic forecasting and modelling to UK companies and financial institutions and which claims to be ne of the world’s foremost independent global advisory firms. http://weir.co.uk/independencereport
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  2. Financial Times: Finance groups seek to soothe fears over Scotland vote. 8 September 2014.
  3. Standard Life Chief Executive's Overview, 2013 Annual Report & Accounts page 8 (Feb 2014)
  4. Standard Life: Update on Scottish Referendum (retrieved 12 Sept 2014)
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Effect on the Financial Services sector

In the opinion of Sir George Mathewson, a former chief executive of Royal Bank of Scotland, independence will bring new opportunities for Scotland’s financial sector – which is one of the country’s strengths, though it is neglected by the Westminster government and its London-centric policy. Scotland can use the powers of independence to attract new businesses and new entrants to the market and to compete with other European financial capitals, especially in the growth area of asset management. This should be achieved in a currency union with the UK, under a common regulatory framework reflecting the interconnected nature of our financial systems[1].

Lloyds Banking Group said that “In the event of a ‘Yes’ vote in the referendum, there would be no immediate changes or issues which could affect our business or our customers.” Aegon, the parent of Scottish Equitable, the pension provider, said in the event of a yes vote it did not expect any changes to take effect immediately. Mark Dampier, quoted opposite, also said
"Most companies are adept at surviving what politicians throw at them. Just look at the eurozone as a great example."[2]

Relocation of financial services institutions

Standard Life's statement followed a list of "material issues" which "remain uncertain"[3]. This arose from the obligation to produce a business review to shareholders which contains a description of the principal risks and uncertainties facing the company[4].

References

  1. Financial Times Aug 4, 2014 http://www.ft.com/cms/s/0/ecd409fc-1b37-11e4-b649-00144feabdc0.html
  2. Financial Times: Finance groups seek to soothe fears over Scotland vote. 8 September 2014.
  3. Standard Life Chief Executive's Overview, 2013 Annual Report & Accounts page 8 (Feb 2014)
  4. Companies Act 2006, Section 417(3)