Scottish independence: Questions raised over financial regulation plans

THE SNP’s plan to maintain a UK-wide oversight of its financial sector after independence may be illegal under EU law, the body representing the industry said yesterday.

A day after Scotland’s finance secretary John Swinney said he wanted to maintain UK-wide financial regulation, Scottish Financial Enterprise said it was “unsure” about the idea.

The organisation’s chief executive Owen Kelly said: “Our understanding is each member state of the EU must have its own regulator.”

The Treasury claimed the SNP plans were “totally unclear” last night, saying Scottish ministers had to say whether they wanted to tie themselves to a full monetary pact, or a looser arrangement.

A formal deal would mean that all decisions on borrowing and spending “would have to be agreed with the UK government and exercised centrally”, it added.

The Treasury also said that a cross-Border system of financial regulation would face “obstacles in terms of EU law”.

The SNP says Bank of England regulations would also apply in Scotland after independence, despite the party having previously criticised London’s control of the banking sector.

Scottish Labour Leader Johann Lamont said: “The SNP are making this up as they go along.

“The bank regulators they blamed for the collapse of the banking system are now the people they want to be in charge of the banking system.

“It is a kind of constitutional hokey-cokey.

“Fiscal policy in, monetary policy out, in-out, in out, shake it all about.