Records of the Bank of Scotland 1695 2001

A new report from the Adam Smith Institute, “Quids In: How sterlingization and free banking could help Scotland flourish”, was featured in The Guardian, The Sun, The Telegraph and The Times.

The report argues that an independent Scotland could have a more stable economy than the rest of the UK if adopted a policy of, what it calls, ‘adaptive sterlingization’, which combines unilateral use of the pound with financial reforms to remove government protection of established banks.

From The Guardian:

An independent Scotland that carried on using the pound without the permission of the rest of the UK would have a stronger economy than it does now, a free-market thinktank said on Thursday.

The Adam Smith Institute said the country would not only survive but thrive outside of a formal currency union provided there were changes to the banking system to inject competition and reduce risk-taking.

From The Sun:

Sir Ian Wood said Alex Salmond’s SNP has over-estimated the amount of oil – and tax revenues – by up to 65 per cent.

Better Together campaign lead Alistair Darling said the news was “devastating” for Mr Salmond’s plans.

It came as a think-tank claimed Scotland would “thrive” using the Pound outside a currency union.

The Adam Smith Institute said the “dollarised” economies of Latin America were proof countries can flourish when they adopt another’s currency.”

From The Telegraph:

Yesterday the Adam Smith Institute suggested Scotland would actually benefit from adopting sterlingisation – using the pound without a formal currency union – after independence.

The idea, which has been floated by the First Minister as a potential backup plan, would create a more stable financial system by freeing banks of certain constraints, researchers found.

From The Times:

An independent Scotland could flourish by using the pound even without the permission of the rest of the UK, according to a think-tank.

The Adam Smith Institute points to Panama as a successful example of an economy piggybacking on a neighbour’s currency — the US dollar.

It said it was neutral on Scottish independence but said the the nationalists’ plan to continue with the pound — which many regard as a stumbling block — could work very well.

The report, “Quids In: How sterlingization and free banking could help Scotland flourish”, can be read and downloaded for free here.