Scotland Won't Keep Uk's Aaa Rating If It Gains Independence, Says Fitch

[South Lorne]

http://www.telegraph.co.uk/finance/economics/9224182/Scotland-wont-keep-UKs-AAA-rating-if-it-gains-independence-says-Fitch.html

'Although the precise division of UK assets and liabilities has not yet been established by the Scottish Nationalists, Fitch told the Treasury Select Committee that the lack of a repayment track record could scupper Edinburgh's chances of inheriting the UK's rating.

Under sustained questioning from Michael Fallon, MP for Sevenoaks, the director of Fitch, David Riley, said: "I am not aware of any situation where we have awarded AAA rating to a newly independent sovereign nation."

The directors from Fitch, Standard & Poor's and Moody's were being grilled over their decisions to downgrade sovereign ratings, some of which have triggered turmoil in the stockmarkets. In a sometimes heated meeting, during which Bury MP David Ruffley stormed out, the agencies denied the downgrades were "marketing" decisions made to grab headlines.

Moritz Kramer, head of sovereigns at S&P, insisted his company's decision to strip America of its AAA rating last summer was not a "mistake", even though the yield on US Treasury bonds has fallen by a fifth since then.

Asked if it were really his "belief that the US's desire and capacity to repay its debts was lower than [the AAA-rated] Finland," Mr Kramer said: "I do." He said compared with Finland, America's debt ratio was higher, its debt trajectory worse, and its political policies for debt reduction less coherent. '

oh joy.Does that mean we get to keep them?

...no joy if you would like to get rid of their Labour MPs from Westminster.....

[billybong]

"I am not aware of any situation where we have awarded AAA rating to a newly independent sovereign nation."

A "newly independent sovereign nation".

Yeah right

That's just a total laugh if they don't have their own currency - and control over it.

Give me control of a nation's money and I care not who makes her laws.

[South Lorne]

A "newly independent sovereign nation".

Yeah right

That's just a total laugh if they don't have their own currency - and control over it.

...it could be a change from GBP to SPP..Scottish Petro Pound....

[mfs1959]

A "newly independent sovereign nation".

Yeah right

That's just a total laugh if they don't have their own currency - and control over it.

But they will have their own money, the pound sterling. And they'll have control since Nicola Sturgeon said Scotland would expect to appoint a member to the MPC.

On the other hand, given the remit under which the MPC works, you're right.

[South Lorne]

But they will have their own money, the pound sterling. And they'll have control since Nicola Sturgeon said Scotland would expect to appoint a member to the MPC.

On the other hand, given the remit under which the MPC works, you're right.

...funny kind of independence she's after ...one with a parachute held with strings....typical....she's a joker.....

[billybong]

But they will have their own money, the pound sterling. And they'll have control since Nicola Sturgeon said Scotland would expect to appoint a member to the MPC.

On the other hand, given the remit under which the MPC works, you're right.

In the euro zone Greece has ECB representation - look what's happening to Greece.

They're currently pushing it around from pillar to post.

[Democorruptcy]

They print Scottish notes so why can't they have a Triple AAA?

Surely this ability to print means they can buy their own debt and so be a permanent safe haven?

[The Ayatollah Buggeri]

They print Scottish notes so why can't they have a Triple AAA?

Surely this ability to print means they can buy their own debt and so be a permanent safe haven?

If they were totally independent, they would not have the ability to print another country's currency. So either they'd have to use the GBP with the BoE controlling the money supply and the Scots having no say over it (as with Panama and the USD), join the euro (ditto, although in that scenario they'd have a small say in monetary policy decisions) or launch their own currency.

[AThirdWay]

An independant Scotland, in it's formative years, wouldn't give a flying fox what these jokers rated us at. The downgrading of the US being case in point. Did the markets care? Not a jot!

We've got a few years as an oil exporter to see us through. Should give us enough time to create a tax structure that manufacturing industries like....

[Democorruptcy]

If they were totally independent, they would not have the ability to print another country's currency. So either they'd have to use the GBP with the BoE controlling the money supply and the Scots having no say over it (as with Panama and the USD), join the euro (ditto, although in that scenario they'd have a small say in monetary policy decisions) or launch their own currency.

It's launch their own currency then they can print and be a triple AAA safe haven like us.

[cashinmattress]

What the heck difference does it make to anybody? Why all the Scotland bashing on this forum about house prices?

An independent Scotland would only mean a virtual border, not unlike it is now, and the rest of you could get on with your equally wretched lives here on this tiny exhausted continent.

[AThirdWay]

What the heck difference does it make to anybody? Why all the Scotland bashing on this forum about house prices?

An independent Scotland would only mean a virtual border, not unlike it is now, and the rest of you could get on with your equally wretched lives here on this tiny exhausted continent.

Misery loves company

[Peter Hun]

What the heck difference does it make to anybody? Why all the Scotland bashing on this forum about house prices?

An independent Scotland would only mean a virtual border, not unlike it is now, and the rest of you could get on with your equally wretched lives here on this tiny exhausted continent.

It would cut down English taxes and help the economy, so its relevant. Plus, its fun to bash the Independence movement as they demonstrate fiscal naivety on par with HPI.

An independant Scotland, in it's formative years, wouldn't give a flying fox what these jokers rated us at. The downgrading of the US being case in point. Did the markets care? Not a jot!

Case in point, the delusion that a socialist country of five million is as stable and comparable to a capitalist economy 100 time bigger.

Try a comparison with Panama instead

[cashinmattress]

It would cut down English taxes and help the economy, so its relevant. Plus, its fun to bash the Independence movement as they demonstrate fiscal naivety on par with HPI.

I don't think you know what you're talking about, and your sentiment is biased to the point of bigotry I'd hazard.

Mods, put into current affairs please.

[Democorruptcy]

What the heck difference does it make to anybody? Why all the Scotland bashing on this forum about house prices?

An independent Scotland would only mean a virtual border, not unlike it is now, and the rest of you could get on with your equally wretched lives here on this tiny exhausted continent.

I didn't think this was a Scotland bashing thread. I think you might get more now though.

[Peter Hun]

I don't think you know what you're talking about, and your sentiment is biased to the point of bigotry I'd hazard.

Mods, put into current affairs please.

Or you could just run and hide.

If they were totally independent, they would not have the ability to print another country's currency. So either they'd have to use the GBP with the BoE controlling the money supply and the Scots having no say over it

A big problem would come with the banks, obviously the BoE would not be a lender of last resort so they will have to choose who they report to. Now if that means they have to be headquartered in the UK, the question would be why these banks have so many of their staff employed in a foreign country.

If the banks decide to go from a AAA currency to a lower rating currency, stay in Scotland, then who knows what that amount of debt would do to their economy, the Uk is barely standing now. Dump that on a Scottish banking system and it would be nonviable.

Iceland would be a interesting comparison (only 10x GDP debt), they tried to move the banks to the Euro, didn't happen. They have capital controls and a failing economy to look forward to for a decade or so.

[AThirdWay]

Case in point, the delusion that a socialist country of five million is as stable and comparable to a capitalist economy 100 time bigger.

Try a comparison with Panama instead

Now now Peter, don't be silly! I used the US as an example to highlight the lack of regard for the ratings given by Fitch, not as an example of how the Scottish economy will look. I hope your understanding of financial matters is better than your understanding of the English language

Anyhoo.... I'm no expert on financial matters myself, but I am looking forward to all those lovely petro-dollars working for Scotland and not the rest of the UK. Excluding Lahndan of course.

Or perhaps we should sell for Indian rupees? Decisions, decisions......

[Peter Hun]

Now now Peter, don't be silly! I used the US as an example to highlight the lack of regard for the ratings given by Fitch, not as an example of how the Scottish economy will look. I hope your understanding of financial matters is better than your understanding of the English language

Anyhoo.... I'm no expert on financial matters myself, but I am looking forward to all those lovely petro-dollars working for Scotland and not the rest of the UK. Excluding Lahndan of course.

Or perhaps we should sell for Indian rupees? Decisions, decisions......

Look at Iceland as a comparison, you cannot ignore the banks as they are going to be much bigger effect on the economy than Oil. Iceland is an energy exporter and resource positive (fish).

Green energy is Scotland real future, not oil; its resources are infinite

[cashinmattress]

Or you could just run and hide.

A big problem would come with the banks, obviously the BoE would not be a lender of last resort so they will have to choose who they report to. Now if that means they have to be headquartered in the UK, the question would be why these banks have so many of their staff employed in a foreign country.

If the banks decide to go from a AAA currency to a lower rating currency, stay in Scotland, then who knows what that amount of debt would do to their economy, the Uk is barely standing now. Dump that on a Scottish banking system and it would be nonviable.

If anything, England should be waving the independence banners and saying adieu, because if this forum is the intellectual hotbed some purport it to be, Scottish folk are a bunch of intellectual and fiscal fuddy-duddy's with an English taxpayer supported expense account.

[Peter Hun]

If anything, England should be waving the independence banners and saying adieu, because if this forum is the intellectual hotbed some purport it to be, Scottish folk are a bunch of intellectual and fiscal fuddy-duddy's with an English taxpayer supported expense account.

Well I am and indeed many other English are keen for Scottish independence. The problem is the Scots are far less keen as they seem to find all sorts of excuses not to have a vote.

Have a vote tomorrow and get it over or STFU is a valid expression, I'm afraid..

[AThirdWay]

Look at Iceland as a comparison, you cannot ignore the banks as they are going to be much bigger effect on the economy than Oil. Iceland is an energy exporter and resource positive (fish).

Green energy is Scotland real future, not oil; its resources are infinite

We have a chance to withdraw from the financially driven economy (and look where that's got us!) to a manufacturing based economy. Renewables being a case in point. Your right, we are ideally placed to both generate and develop renewable energy, but we're losing out at the moment. We can use the limited life of our oil resources to create a tax system that attracts this emerging industry to our country.

Do you think Westminster will do this for us?

The elephant in the room is how we extract ourselves from the financial mess that the UK is in. Obviously, being a Scot, I want to accept the burden of wholly Scottish banks. Those that are headquartered in other countries, or owned by a parent company that is headquartered in other countries, are not our problem.

I accept this is unlikely to happen but as oor loon Alex Salmond (I'm not a big fan btw!) said recently, even if we accept the per capita burden, how are we worse off?

[AThirdWay]

Well I am and indeed many other English are keen for Scottish independence. The problem is the Scots are far less keen as they seem to find all sorts of excuses not to have a vote.

Have a vote tomorrow and get it over or STFU is a valid expression, I'm afraid..

And why should we be driven by your opinion? Nothing personal but if you are (as your info tell's me) in Krakow, then you should have even less say in the matter than anyone in the UK!

The SNP have outlined when the referendum shall be held, and did so before the last election. External influeces are just background noise now.

[CrashInHand]

Better for everyone if governments could not borrow any monies.

One would hope if it's more expensive to borrow they would borrow less.

[homeless]

Why is it allways only about money?

Way i see it quality of life matters much more, we think were richer here because we earn triple what someone say in peru earn, yet i see more contented happy people in peru. For your average joe, there aint much between peru, scotland, estonia, zanzibar we all just scrape buy spending most on keeping a roof over our head and feeding ourselves.

[billfunk]

http://www.telegraph.co.uk/finance/economics/9224182/Scotland-wont-keep-UKs-AAA-rating-if-it-gains-independence-says-Fitch.html

'Although the precise division of UK assets and liabilities has not yet been established

I would be more interested if anyone had informed opinions on this.

Too much debt taken on by Scotland would make independence unviable. Too little and it would in effect be theft from the English.