Jump into a DeLorean today and set the date to 1994 (a jump of only 20 years – Marty McFly managed 30). On arrival you will find the UK’s banking system more fragmented than it is today. Bank of Scotland, Royal Bank of Scotland and Clydesdale controlled the Scottish market. In England, Lloyds, NatWest, Barclays and HSBC dominated.
In the event of a Yes vote in the Scottish referendum, banks should go back to the future.
RBS (which bought NatWest in 2000) and Lloyds (which bought Bank of Scotland in 2009) are registered in Scotland. According to Credit Suisse, Scottish banking assets are 1,200 per cent of GDP – even at the height of the mid-2000s boom, few countries hit that level. The last thing a newly independent country would need is an outsized banking system. And RBS and Lloyds, seeking certainty on currencies and deposit guarantees, would probably decamp for the UK.