The City has had to wake up. For the past year, economists, investors and financial strategists have barely bothered to think what Scottish independence would mean for the pound,
That complacency has been exploded by the opinion poll that showed the no campaign with a lead of just 53% to 47% and by the growing sense that the turn-out on 18 September will be very high. Suddenly the question is: what if it does happen?
"The near-term fallout could be serious," says
That worry appears already to be affecting sterling, which hit a seven-month low against the dollar yesterday at
Indeed, amid the unresolved question of an independent
Thinktank Capital Economics says: "We would not be surprised if the Bank of
Bankers themselves, however, wonder how such a policy could be implemented in practice: their systems are not designed to disallow transfers between Scottish and English branches.
Instead, it is the currency question that now obsesses the City. "The most important specific risk, in our view, is that the uncertainty over whether an independent
Daly's view is that Westminster's threat to disband the currency union is "credible" because "one of the main lessons from the euro area crisis is that a reasonably high degree of fiscal and/or financial integration is necessary, as a means of effective risk sharing, for a monetary union to work."
It is the credibility of Westminster's hardball threats on a currency union that markets would almost certainly want to test if the negotiations become messy and if a "velvet" divorce seems out of reach. Markets can force events and a mini-sterling crisis might be the quickest way to resolve uncertainties. And, in
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