future of Scots banks

Speculation over financial institutions

Published:

AFTER last week’s carnage on the London stock market, there will be much trepidation about the week ahead as speculation intensifies over the future make-up of two of Scotland’s biggest companies. Gordon Brown, on the ropes a few weeks ago as his party leadership appeared to be in tatters, has been re-born and was yesterday trying to lead the world towards financial salvation.

British eyes, however, will be fixed firmly on the Royal Bank of Scotland and HBOS over the possibility of the government becoming the major shareholder in both and having a seat on their boards.

This extraordinary turn of events would have been unbelievable a few weeks ago, but now many observers see such an intervention reining in the worst excesses of financial gambling that has been seen across the banking sector and which helped to create the crisis in the first place.

If the government did gain overall control, then it follows that it would also have a major say on who ran the company in the interests of taxpayers, along with pegging back obscene pay packets and bonuses.

The plight of these two huge Scottish institutions made some observers ponder how the country itself would fare in such a situation if Alex Salmond achieved independence.

Yesterday, opponents mocked his liking for holding up small independent European nations as shining examples of what Scotland could achieve, especially as they were now in dire straits and highly vulnerable.

Would Scotland alone be better or worse equipped to ride out the storm and is it safer within the UK or not? The issue is worthy of rigorous examination as part of Mr Salmond’s national conversation over independence.