Scottish independence: Is the Royal Bank of Scotland a Scottish bank?

RBS headquarters in London RBS has headquarters in London as well as Edinburgh

For sure, the Royal Bank of Scotland is registered under the starry dome of Dundas House, a handsome townhouse in Edinburgh's Georgian New Town.

But it has been a long time since the bulk of the bank's business was conducted here.

Likewise, Lloyds Banking Group is registered in Edinburgh's Old Town, in a building which helps define the city skyline, under the green dome of the old Bank of Scotland headquarters.

But this is more an accident of corporate history than an indication of where Lloyds makes its money.

It would probably make more difference to RBS than to Lloyds if the registered offices moved south.

Bail out

Both firms have head offices - real operational headquarters as opposed to formal registered offices - in London but RBS also has a head office at Gogarburn on the outskirts of Edinburgh.

Neither bank will comment officially on whether their registered offices would move, let alone on what effect such a move might have on their head offices or on jobs.

But if the effect on employment was minimal such moves could be good news for an independent Scotland, removing the prospect of having to bail out these giants if they ran into trouble again.

It might also be a boon for the "yes" campaign, removing a key plank of the chancellor George Osborne's argument against a formal currency union with an independent Scotland, ie that "Scotland's banking sector is far too big in relation to its national income."

However the Scottish government disputes both the Treasury's assessment of the scale of the sector and the suggestion that the banks would need to move their registered offices.

Woolly thinking

Officials in Edinburgh insist that their proposals for a financial regulatory regime "harmonised" across a shared sterling area would be compatible with European law, including Council Directive 95/26/EC.

In any case, they claim, the Scottish financial services sector accounts for just 8% of Scottish GDP, or in other words, an independent Scotland could afford a bail out.

This is wishful, woolly thinking say opponents of independence, who accuse SNP ministers of "putting their fingers in their ears" and creating "risks we do not need to face".

And there is no doubt that if the registered offices of these behemoths did shift to London it would be a blow to Edinburgh's reputation as a financial centre and to Scottish pride.

But this is not a black and white issue. There are many reasons why it is a complicated and tricky subject for both sides of the debate about Scotland's future.

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