Bank of England governor Mark Carney has warned there is a “distinct possibility” that the Royal Bank of Scotland would have to move outside of Scotland if voters back independence.
MPs were also told that the rest of the UK was likely to end up bailing out Scotland in the event of a crisis if there was a currency union even if there were explicit guarantees written into an agreement ruling out such an event.
European laws that require banks to have their head offices in the same member state as their registered offices would be likely to hit Scotland, the Treasury select committee heard.
Asked if RBS would have to move to the remaining UK if an independent Scotland joined the EU, Mr Carney said: “It’s a distinct possibility but I shouldn’t prejudge it.
“It depends on their arrangements as well, if they were to adjust more into Scotland the minor management of the institution.”
Committee chairman Andrew Tyrie said: “Distinct possibility is a central bank phrase with a sort of layer of lawyer on top.”
Chancellor George Osborne has already ruled out a currency union with an independent Scotland.
First Minister Alex Salmond’s Scottish government wants to create a “sterling zone” with the rest of the UK if there is a Yes vote in the break-away referendum.
Mr Carney said in a speech in January that an effective currency union would force a newly-independent Scotland to hand over some national sovereignty in a similar way to the eurozone.
He told MPs yesterday that the Bank of England did not have to be the lender of last resort to Scottish banks if there was no formal currency union and would be “very conscious of the exposure to the public balance sheet”.