Scottish independence: Former banker doubts currency plan
Plans to keep sterling after independence have been described as "fundamentally flawed" by a former banker.
Prof Brian Quinn, a former Bank of England executive, set out his views in a David Hume Institute paper.
He said problems with a currency union could appear if the economies diverge.
A Scottish government spokeswoman said sharing the pound would be in the best interests of Scotland and the rest of the UK.
Prof Quinn claimed that Scottish financial institutions could be considered "riskier", that crisis management may suffer and that an assumption other UK taxpayers could share the costs of the collapse of Scottish banks "does not appear to have a legitimate basis".
He accepted that many of the questions raised by plans for a sterling zone covering an independent Scotland and the rest of the UK could be answered in negotiations with the UK government.
But he argued that others, particularly in accountability and governance, appear more fundamental.
Period of transition
He wrote: "The paper concludes that the concept of a shared system of supervision and crisis management is seriously - perhaps fundamentally - flawed and that its weaknesses would increase during the indeterminate period of transition following independence.
"This, together with the uncertainties regarding Scotland's continued use of sterling arising from its proposed membership of the EU, are likely to result in higher prudential requirements for Scottish financial institutions.
"In these circumstances it would not be surprising if they reconsidered their group structures and main domicile."
Prof Quinn was head of banking supervision at the Bank of England between 1982 and 1988, becoming deputy governor in 1995.
He retired in 1996.
Commenting on Prof Quinn's report, a Scotland Office spokesman said: "As a Scot who worked at the highest levels inside the Bank of England, Brian Quinn understands these issues better than almost anyone.
"His report catalogues the many currency and financial problems that would be waiting to greet an independent Scotland.
"We don't want that. We want Scotland to prosper with the best possible currency option which is the Pound. The only way to be sure of keeping the Pound is to keep Scotland part of the UK."
The currency union proposal was backed by the Fiscal Commission Working Group, which reported to the Scottish government in February.
Its report said: "On day one of independence, the members of the working group agree that retaining sterling would be a sensible currency choice that would be attractive both to Scotland and the UK."
A Scottish government spokeswoman said: "As the fiscal commission have set out, continuing to share our currency is in the best interests of Scotland and the rest of the UK, with Scotland making an valuable contribution to the UK's balance of payments and the rest of the UK exporting more to Scotland than to Brazil, South Africa, Russia, India, China and Japan put together.
"In the same way it will be in the interests of the rest of the UK for the Bank of England to continue its role in delivering financial stability, in addition to monetary stability, across the sterling zone given the cross-border nature of the financial system."