Scottish independence: Nation could lose AAA rating

A NEWLY independent Scotland could lose its AAA credit rating, director of Fitch David Riley told the Treasury Select Committee yesterday.

Directors from Fitch, Standard & Poor’s and Moody’s were being questioned about how their companies graded different countries on their creditworthy status.

Being stripped of the top AAA rating can lead to more expensive borrowing for a sovereign nation.

Mr Riley told the committee he knew of no situtation where a newly independent sovereign nation had been awarded a top AAA credit rating.

Conservative MP Michael Fallon said according to Mr Riley’s reasoning: “It would be pretty hard for Scotland on day one to get any where near a triple A rating.”

In the context of the eurozone crisis, the agencies agreed the UK’s independent Bank of England made it a stronger sovereign investment. Alastair Wilson, the chief credit officer at Moody’s, said: “The existence of strong institutions to support government policy is a factor [in deciding sovereign credit ratings].”