A ‘yes’ vote for Scottish independence would trigger a rapid movement of savings deposits into the rest of the UK, UBS has predicted.
Analysts at the bank say savers would be reluctant to keep their deposits in Scotland without the Bank of England as a lender of last resort to Scottish banks, the Telegraph reports.
The Treasury has insisted that an independent Scotland would not have a currency union with the UK.
UBS says deposits are likely to move south of the border even during the interim negotiation period between September’s vote and Scotland’s secession, which would happen around 18 months later.
In a research note, UBS says: “It probably does not matter that the Bank of England will act as lender of last resort during the transition period – history has shown that small depositors will queue to withdraw their money from a bank even when those deposits are fully guaranteed.”
It says bank accounts in Scotland would have to offer higher interest rates to encourage depositors to stay north of the border.
UBS argues that if deposits are moved to the rest of the UK, it will have a significant impact on the economies of the two countries.
It says: “Depending on the severity of deposit movement, there could be a reallocation of GDP generation from Scotland to the rest of the UK.”