Financial crisis bank says ‘Scottish independence will cause uncertainty’

Financial crisis bank says ‘Scottish independence will cause uncertainty’

If you are a Scot and hoped that you would be allowed a positive, constructive and honest debate on the Scottish independence referendum you will now be under no illusion that such respect will be extended to you or anyone else.


You are about to be treated to fire and brimstone sermons for being a naughty jock and having the audacity to see the constitutional future of your nation as a matter which rises above the interests of big business. Quaint innocence.

Is it too much to want sufficient time for a considered debate on remaining within the Union or not? According to Peter Atherton, managing director of Citigroup, the uncertainty caused by having that referendum debate will mean Wee Willie Winkie will come and take you away.

Having recently cautioned companies on investment policy in relation to Scotland and in particular investment in renewables, MSPs were justifiably keen to question Mr Atherton about his warnings. The Citigroup banker told MSPs on the Scottish Parliament’s economy, energy and tourism committee that the looming referendum is damaging confidence.

Without giving any specific evidence of uncertainty or naming any companies that were actually reviewing investment policy in relation to Scotland Mr Atherton said:

“The idea that you can have a referendum on secession and not believe that it creates some uncertainty for investors in certain sectors, like utilities, which is a regulated energy sector, is preposterous.”

Committee MSP Chic Brodie observed that investments in Scotland by very large companies were still rolling in and that Mr Atherton’s analysis had been shot down by “luminaries such as Peter Jones. In The Times (newspaper), he said these simplistic assumptions devalue the Citigroup analyses of the future, something about which I agree.”

Mr Atherton was unmoved and reiterated his assessment:

“The suggestion that Scotland having a referendum on whether to stay in the UK or not carries no uncertainty and no risk for particular sectors is preposterous.”

Lack of evidence aside if Mr Atherton could not generate any light he did provide heat. In so doing he runs the risk of stepping into choppy waters himself.

Citigroup is one of the top global merchant banks which caused the global financial crisis  A crisis which continues and now threatens the economies of countries around the world. A crisis which now threatens the very existence of the Euro currency. A crisis which is now bringing austerity to families around Scotland and the wider world. Can we realistically view Citigroup as the arbiter of ‘uncertainty’?

Today one influential US writer talked of Citigroup’s role in the financial crisis saying it was “guilty of massive, coordinated securities fraud.”

One of the reasons for the financial crisis was that merchant bankers had a multiplicity of conflicts of interest. Does Citibank have a horse in the independence race? Undoubtedly.

Merchant banks are under no illusions about the role North Sea oil plays in underwriting the UK’s debt. No oil, no guarantee of bailouts and a stronger liklihood of the UK defaulting on £1 trillion of debt. A debt owed to the clients of global merchant banks.

Should Scots react in panic to appease the Mr Athertons of this world and call off taking a decision over the nation’s long term future? No, say an increasing number of Unionist politicians. One prominent Unionist narrative is that the referendum should take place as soon as possible so as not to spook investors.

That sounds like a sensible reaction but once the practicalities are considered this strategy seems to cause the illness it purports to cure. Don’t markets like to see well managed restructuring? Without time to let the issues breathe the constituent nations of Britain will be less able to fully grasp the depth and breadth of the constitutional transition their respective states face. A snap referendum really could cause investment uncertainty as the details of the transition will not have been thrashed out over a sensible time frame.

Beware global merchants of doom.

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