UKRob said:
Simple question - and maybe someone will be able to tell me what the answer is - has anyone asked the Independence party to explain what their strategy is in the event of not being able to use sterling?
One thing is for sure - you cannot control economic policy if you don't control the purse strings.
In the event etc. nobody would be able to stop Scotland using sterling (anyone can use any currency they choose), Isle of Man use it for example. Of course like IoM we wouldn't accept Scottish notes ironically.
We're each other's biggest import/export market, so using sterling would make that easier but a new currency would possibly make more sense. The ideas thrown around that Scotland somehow wont be able to do anything for themselves is absurd and bordering on insulting if not downright racist. Scottish enlightenment was a major influence and driving force in
American independence.
"When Estonia gained independence in August 1991, the government decided to create a new currency to replace the rouble. Less than a year later, in June 1992, deposits held in Estonian banks were redenominated, from roubles to kroons. Special counters at the new central bank were opened to allow residents to swap the old currency for the new one. As a show of confidence in the kroon, residents were also permitted to switch roubles for German marks, a strong currency. The scheme, reviewed in a 2002 IMF paper, worked well: the switch to a new central bank and currency took a week.
An independent Scotland should be able to follow this example. It will have more time to plan: fully 18 months between the vote and independence, which would come in May 2016. Scottish notes already circulate, and production could easily be scaled up. The new country's share of Britain's foreign-exchange reserves—around £9 billion—would provide credibility."
Full article
here.
When I worked at a certain Scottish bank we had to change our domestic only systems to from sinlge currency to also allow euros to allow for banking services in Ireland and that cost millions, but most systems already cater for foreign currency and it's just a case of adding a few new settings to a parameter file or table.
