Enlightening the Constitutional Debate: Currency, Banking and Financial Services after the Scottish Referendum

10 Sep 2013

The report on the fifth of the British Academy and Royal Society of Edinburgh (RSE) events on Enlightening the Constitutional Debate has been published.

On Wednesday 24th July 2013 the British Academy and the Royal Society of Edinburgh held a small forum, with invited experts, to discuss questions surrounding banking and financial services in the aftermath of the referendum on Scottish independence. Leading economists and senior policymakers from HM Treasury and the Scottish Government discussed the currency options available to an independent Scotland, the implications of that choice for the rest of the UK, and the knock-on implications for fiscal rules and financial regulation. The report is an unattributed summary of these discussions.

The forum was hosted and chaired by Professor Tim Besley CBE FBA, Professor of Economics and Political Science at the London School of Economics and Political Science.

A number of key messages arose from the discussion including:

  • Retaining Sterling as part of a formal monetary union is seen by many, including the Scottish Government, as the best option for Scotland, but there is a need for a more adequate understanding of the potential financial risks of a shared currency.

  • Questions about how UK debt should be handled would be a key part of any negotiations in the event of a 'Yes' vote.

  • Scottish voters voting in the forthcoming Referendum will be doing so in a situation of huge uncertainty, in which they do not have clear knowledge of the costs and benefits of the various potential outcomes.

You can download the The Currency, Banking and Financial Services and the Scottish Referendum report here.

The RSE will also be hosting a public event in January/February 2014 in Edinburgh covering these and related economic issues, for which a detailed list of speakers will be made available once they are all confirmed.


Editor's notes:

    • The views recorded in the report are those of the expert speakers who made their own introductory contributions and those of the invited guests who participated in the open discussion.

    • The discussion took place under the Chatham House rule. The contents of the report though can be published, providing attribution is not made to the individual speaker.

    • For more information, please contact Bristow Muldoon at the RSE on[email protected], 0131 240 2787 or 07766 915218 or for the London events, Kate Rosser Frost, Head of Press & Communciations at the British Academy on[email protected] or 020 7969 5263.


    • In February 2013, the Royal Society of Edinburgh and the British Academy launched a series of events to Enlighten the Constitutional Debate in advance of the forthcoming referendum on Scotland's future relationship with the rest of the United Kingdom. The intention of these events is to look at specific areas of policy. Events in Scotland, hosted by the RSE, have discussed: Defence and International Relations; the Real Economy; and Culture & Broadcasting; with events on Borders, Immigration and Citizenship; Science and Higher Education; Public Services and Welfare; and Taxation and Monetary Policy to followThe BA has hosted policy forums in London on: Tax and Spending; and Currency, Banking and Financial Services; with an event on Historical, Legal & Constitutional Issues to follow.

    • Reports of the previous events have been published online (with the Culture and Broadcasting debate to be published soon). Details of all of the events are available on the RSE and BA websites.


    • The BA and the RSE are both independent organisations with no party-political agenda or positions.  We believe that it is important that the series of events is drawn to the attention of all of the major political parties and the two main campaign groups that have been established to contest the referendum. As such the Presidents of the BA and the RSE have written jointly to leading figures on both sides of the debate.


    • The Royal Society of Edinburgh, established by Royal Charter in 1783, is the National Academy of Scotland. It has a multi-disciplinary Fellowship of over 1500 and is dedicated to the "Advancement of Useful Knowledge." It runs a wide range of programmes including policy advice, events, educational outreach and also awards Enterprise and Research Fellowships. Further information about the Society can be found at


  • The British Academy, established by Royal Charter in 1902, champions and supports the humanities and social sciences, throughout the UK and internationally.  Its Policy Centre oversees a programme of activity aimed at stimulating dialogue and engagement between leading researchers, parliamentarians and policymakers in the UK and abroad. It aims to shed light on matters of public interest and concern, drawing on insights derived from the best available research in the humanities and social sciences.  Follow the British Academy on @britac_news

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