Westminster-City bank scandal threat to Scottish jobs

westminster-cuts.jpg
With Westminster and regulators caught up in the Libor scandal, Scottish
jobs could go

Scottish news: Westminster-City bank scandal threat to Scottish jobs

The Libor (London Interbank Offered Rate) scandal is set to have a major negative impact on the economy according to press reports.

The scandal which has brought allegations of collusion between UK Governments, banks and regulators carries potential costs of litigation which are so unfathomable that a huge range of markets will be affected further depressing the UK economy which is already contracting due to the financial crisis.

Those with shares, including pension funds, in companies across numerous sectors of the UK economy will now have to factor potentially huge legal costs into their investment portfolios.

Libor manipulation is a crime that already extracts the public’s wealth to create bonuses for bankers. By artificially lowering interest rates, the banks caused cities, towns, countries, and other public entities to receive smaller returns on their variable-rate investment holdings.

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Taxpayers may have to pay RBS fine

The Royal Bank of Scotland is about to be fined £150 million pounds for its role in the Libor-rigging scandal. However, it transpires that the bank will not be able to recoup the money from traders meaning it is likely that shareholders will be made to pay. The problem is that 82 percent of the shareholders are taxpayers. If it turns out that taxpayers end up paying the fine for RBS's crime of fixing interest rates which extracted wealth from taxpayers, public trust in the UK financial system will continue to flat-line.

SNP currency policy problem as UK financial scandal deepens

The UK regulator, the Financial Services Authority (FSA), colluded with banks to protect the interests of financiers, documents have revealed. The release of previously restricted minutes of meetings held between the FSA and 13 senior financial industry trade bodies show worrying levels of collusion reports the Guardian. The financial bodies include the British Bankers Association (BBA) and the Association of Financial Markets in Europe.

As allegation follows allegation of systemic corruption in the UK's financial system, it is unclear how Alex Salmond's party can justify retaining UK authorities as regulators of an independent Scotland's currency and financial institutions.

SNP Finance Secretary, John Swinney, has hinted that the scandal may mean that keeping UK regulators post-independence may not be an option. As international investors lose faith in the UK and Westminster's parliamentary inquiry into the matter, pressure will mount on the SNP to review its policy and begin planning an independent monetary framework for Scotland.

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published this page in News 2012-07-11 12:31:00 +0100