S&P: Independent Scotland could face 'Icelandic' banking crisis

In a report published today (24 April), the ratings agency said it typically factored in government support when rating prominent banks. An independent Scotland within a sterling currency union would inherit financial safety nets, it suggested, such as the lender of last resort. However, in the absence of a currency union, the report described the prospects of a bail-out as “challenging”. For example, S&P's said if Scotland joined the euro it would be required to set up its own deposit insurance arrangements, but said it would struggle to fund such a scheme, leaving the country ope...