Should an independent Scotland
keep the pound?
keep the pound?
by Lawrence H. White (13 February 2014)
On 18 September 2014, Scotland will hold a voter referendum on whether it should become independent. If voters say ‘yes’, what money should the newly independent Scotland adopt [...]A proposal
An independent Scottish government would best serve its citizens by remaining on sterling for the time being. Representation on the Bank of England’s Monetary Policy Committee is not important and Scotland does not have to avail itself of the other central bank services and restrictions of the Bank of England. Scotland should continue to allow local private note-issue, but eliminate the 100 per cent marginal sterling reserve requirement. Of course, it should allow the public to have bank accounts and currency in euros, dollars or Swiss francs if they wish. Then, should the pound sterling weaken substantially in the future, free choice in currency would allow for a spontaneous transition to whatever currency standard the public then prefers.
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