A new Scottish bank would benefit Scotland - Salmond

Published on Thursday 5 November 2009 14:45

SCOTLAND would gain if a new Scots-owned bank emerged from the current upheaval in the financial sector, Alex Salmond told MSPs today.

Alex Salmond: in favour of a Scots-owned bank

The First Minister spoke out on the issue just two days after details of the proposed sell-off of large parts of the Royal Bank of Scotland and Lloyds were revealed.

RBS is selling RBS-branded branches in England and Wales, its NatWest branches in Scotland, the Churchill and Direct Line insurance arm and parts of its investment banking business as the price of state support.

And the Lloyds Banking Group will offload its Lloyds branches in Scotland, its Cheltenham and Gloucester branches, and the Intelligent Finance online business.

The details were revealed on Tuesday, the same day that the UK Government announced plans to pump another 30 billion of public money into the two banks.

Today Mr Salmond said it would be a "good thing" if the shake-up in the financial sector resulted in either a new bank with a Scottish headquarters or a Scottish owned bank being established.

Speaking at First Minister's Questions in the Scottish Parliament he said: "I think if there is the opportunity to either re-establish a new bank with a Scottish headquarters, or indeed a Scottish-owned bank, that would be good for customers, good for competition and a good thing for Scotland."

The issue had been raised by Liberal Democrat leader Tavish Scott, who said Lloyds and RBS were being given "a further enormous wallop of taxpayers' money".

And Mr Scott challenged the First Minister to set out "what shape he wants for Scottish banking".

The Liberal Democrat claimed Chancellor Alistair Darling "couldn't say whether he wants more of the bonuses are back and greed is good banking, or whether he wants and we should have separate retail and business banks that get the economy moving".

But he said Mervyn King, the Governor of the Bank of England, had been clear when he made the case for breaking up banks.

Mr Scott asked: "Does the First Minister agree that we should split the casino banks that can fail from solid, reliable business banks that can not be allowed to?

"Wouldn't that give taxpayers something to show for all the money that has been spent, wouldn't that be good for business and good for Scotland's reputation in the world."

Tavish Scott will be online on scotsman.com from 4pm today for a live webchat.

Join in here or send your question to [e-mail].

Mr Salmond told him: "I think there are potential benefits for Scotland in having more competition in the retail banking sector."

He also stressed the sell of the Churchill and Direct Line insurance companies must not result in a loss of competition, stating these firms should not be "taken over by another general insurance company, which would both reduce competition and be a substantial threat to 1,600 jobs in the city of Glasgow".

The First Minister said: "Let's have more competition in banking, but let's make sure that these vital assets remain an important asset for competition in the sector and let's make sure that Glasgow retains these 1,600 vital jobs."