It states: “Kilt-edged securities would sell at higher yields. Scotland would have to pay more to borrow than the UK and accept shorter maturities. “The country’s likely high debt, fiscal deficit, weak economic growth, lack of institutional frameworks and low foreign exchange reserves suggest a higher-than-normal debut sovereign yield spread. This would add to Scotland’s fiscal stress. “Oil and gas are critical to Scotland’s finances. North Sea revenues are volatile as they depend on energy prices, production volumes, costs and tax incentives. “Banks and insurers would face pressure to move headquarters to a stronger fiscal state with a more certain regulatory backdrop. Yet a wholesale exodus of staff and operations would be unlikely, given Scotland’s cost advantage over London and other locations. “Utilities doing business in Scotland would likely see financial returns fall as the country would be torn between ambitious targets for renewable power and popular pressure to keep electricity rates low. “Independence would raise regulatory costs and uncertainties for companies. Pension sponsors and trustees would have to change scheme designs and operations. “Fears an independent Scotland would become a bastion of anti-business sentiment are unfounded, in our view. The SG would likely go out of its way to accommodate the oil industry in particular. Why risk killing the Scottish grouse that lays the golden egg?”
Posted on: Sun, 23 Mar 2014 19:41:47 +0000
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