According to a report by the international finance magazine The Banker, a ‘yes’ vote in the forthcoming referendum on independence could result in the destabilisation of Scotland’s economy. The publication also argues that Scotland would have been “devastated”, if it had been an independent country during the financial crisis.

The argument is that, in the event of independence, Scotland would assume financial responsibility for Scottish-based groups such as Clydesdale, HBOS and RBS. If another ‘crash’ occurred, the country would not be able to cope, because it would need to cover banking assets 12-times the size of its GDP.

This draws parallels with Iceland, which had to be bailed out by the International Monetary Fund (IMF) after the 2008 collapse of its banking industry. Iceland had a 10:1 banking assets-to-GDP ratio, which proved “ruinous” for the country, leading to the IMF agreeing to a $2.1 billion emergency loan when the value of its currency collapsed after the failure of its banks.

Brian Caplen, editor of The Banker, says: “Had it been independent during the financial crisis, there is little doubt that Scotland would have been devastated and forced to turn to the IMF for help. The temptation under independence would be to give Edinburgh ‘light-touch’ regulation to make it more competitive as a financial centre; this might have serious consequences.”

However, a Scottish Executive spokesman said that the magazine’s data was “outdated” and made the point that Scotland’s financial services sector accounts for about 7% of the country’s economy. “The figures quoted in this report artificially inflate Scotland’s financial assets by assigning to Scotland investment activity that takes place almost exclusively in London, and by failing to take account of both the recent reforms to the financial-services sector and the de-leveraging of institutions following the UK financial crisis.

“Independence would create the opportunity for Scotland to pursue a more productive, resilient and fairer economic model that delivered long-term sustainability and economic opportunity for all. We have been clear that Scotland will play a full part in protecting the financial system on these isles. Policies for financial stability will be conducted on a consistent basis across the sterling area, with the Bank of England continuing to set macro-prudential policy and identifying systemic risks.”

The subject of independence and its implications for the finance industry were the subject of a debate held in London last week, which was organised by Scots law firm Tods Murray. The meeting heard that the City is “waking up” to the possibility of a ‘yes’ vote in September’s referendum.

Speaking at the event, Stewart Hosie (pictured), the SNP’s Treasury spokesman at Westminster, said independence would give Scotland’s financial sector “the best of both worlds”, enjoying easy access to London and a shared currency, but having its own powers to attract more business. However, deputy Liberal Democrat leader Sir Malcolm Bruce said that uncertainty over any currency partnership with the rest of the UK “will weaken the City and the Scottish financial sector alike.”