‘Can Scotland be independent and keep sterling?’ – ASI report “Quids In” is quoted in The Guardian

The Adam Smith Institute’s report “Quids In: How sterlingization and free banking could help Scotland flourish” is quoted in The Guardian:

With bank runs and bailouts still fresh in people’s memories, Scotland’s sizable financial sector and many other businesses are unlikely to accept such a position.

But the Adam Smith Institute argues that an independent Scotland could flourish by using the pound without permission from the rest of the UK.

The free-market thinktank cites the example of Panama and other Latin American countries that use the dollar as proof that the informal use of another country’s currency “can foster a healthy financial system and economy”.

“Under sterlingisation, Scotland would lack the ability to print money and establish a central bank to act as a lender of last resort. Evidence from dollarised Latin American countries suggests that far from being problematic, this constraint reduces moral hazard within the financial system and forces banks to be prudent, significantly improving the overall quality of the country’s financial institutions. Panama, for example, has the seventh soundest banks in the world,” the institute said in a report last month.

Read the full article here.

Sam Bowman is quoted on the new WEF ranking for the soundness of banks in CityAM

Research Director of the Adam Smith Institute, Sam Bowman, was quoted in CityAM discussing Panama’s placement in the new World Economic Forum ratings on the soundness of banks:

The WEF report shows that Panama has the twelfth-soundest banks in the world, way ahead of the UK, which languishes in 89th place. Why is this is relevant to the Scottish independence debate?

Research director of the Adam Smith Institute (ASI), Sam Bowman, explains:

This is good news for Alex Salmond: Panama uses the US dollar without a currency union, and the ‘Panama option’ may be his best bet for an independent Scotland. Today’s results suggest that emulating Panama by ‘Sterlingising’ without a currency union could give an independent Scotland a remarkably robust financial system because Scotland’s banks could not depend on an unlimited central bank lender of last resort.

Alex Salmond has already said Scotland will keep using the pound if there’s a yes vote, adding “there is literally nothing anyone can do” about it. For its part, the ASI has offered a helping hand to show how an independent Scotland might arrange its monetary policy in the face of hostility to a formal currency union.

Read the full article here.

Press Release: New World Economic Forum rankings suggest ‘Panama model’ may be right for Scotland

Commenting on the release of the new World Economic Forum rankings, Research Director of the Adam Smith Institute, Sam Bowman, said:

The World Economics Forum’s global rankings of economic development, released today (Wed, 3rd September), have named Panama as having the twelfth soundest banks in the world. Panama also scores well in a host of other financial stability metrics, which is particularly impressive given that Panama is a middle-income country.

This is good news for Alex Salmond: Panama uses the US dollar without a currency union, and the ‘Panama option’ may be his best bet for an independent Scotland. Today’s results suggest that emulating Panama by ‘Sterlingising’ without a currency union could give an independent Scotland a remarkably robust financial system, because Scotland’s banks could not depend on an unlimited central bank lender of last resort.

Notes to editors:
The Adam Smith Institute takes no position on the Scottish independence referendum and produces research for public information purposes only.

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Press Release: Sliding towards a police state in response to extremism is just another form of radicalism

Commenting on the Prime Minister’s new anti-terrorism measures, Communications Manager at the Adam Smith Institute, Kate Andrews, said:

The Prime Minister’s decision to creep towards a police state in response to extremist threats is just another form of radicalism. While Islamic State militants gain power by creating a culture of fear, Britain plans to make citizens fearful of their own justice system by further empowering police to confiscate passports and detain travelers without clear evidence of wrongdoing.

The Prime Minister’s nuanced comments and eagerness to work across party lines should not be taken as a dedication to Britain’s long-standing civil liberties – especially when Labour leaders promote enthusiastically the return of control orders and increased surveillance.

The coalition should tread lightly as it looks to expand the powers of the State to combat radicalism; for it is often the good intentions of governments that lead to the radical stifling of individual freedoms and the erosion of the presumption of innocence.

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.