The UK implicitly guarantees all Scottish (and any sub national) borrowing so the risk associated is the same as it would be in lending the UK.
Although I suspect a few here might like to plainly ignore both Moody and S&Ps warnings about Scotland’s rating on independence while simultaneously celebrating their stated reasoning for Scotland’s (legally obligated) fiscal prudence.
The BBC states:
> More recent analysis by the Scottish government suggests that bonds could offer better value for money under certain circumstances as well as greater flexibility.
> Despite attracting a credit rating in line with the wider UK, Scotland is likely to have to pay higher interest costs to sell debt compared with those in the UK gilt market.
> That is partly because the new market would be small compared with the £2.5tn in outstanding UK government bonds, making the bonds harder to trade than gilts.
So why sell kilts rather than gilts if it means we’ll be borrowing at a higher cost? For political reasons rather than the move being fiscally interesting:
> “Although it will involve additional costs, Scotland’s profile could be significantly raised in the international capital markets by using existing devolved powers to issue debt,” said the panel, which was co-chaired by the first minister and Angus Macpherson, an investment banker.
> It would allow Scotland to market its investment story through “regular engagement” with investors and building a “track record”, the panel added.
From February 2014
“Even excluding North Sea output and calculating per capita GDP only by looking at onshore income, Scotland would qualify for our highest economic assessment,” said Standard & Poors.
“Higher GDP per capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports creditworthiness.
“We would expect Scotland to benefit from all the attributes of an investment-grade sovereign credit characterised by its wealthy economy (roughly the size of New Zealand’s), high-quality human capital, flexible product and labour markets and transparent institutions.”
Aye mind the ‘too wee. too poor, too….. ‘campaign
Part of U.K. has same credit rating as U.K. shocker.
From the article:
“Both agencies cautioned that their ratings could potentially be cut if Scotland moves towards independence.”
Listening to Radio Scotland this morning and going by the frothing at the mouth from the usual buffoons here who are desperate for Scotland to be awful at everything, you can tell this is excellent news and says so much about the Scottish Government’s “ prudent fiscal management and the country’s economic stability”.
Well done Scottish Government 😀
Moody’s said its rating was based on the Scottish government’s “prudent fiscal management” and the country’s economic stability.
S&P said Scotland’s economy was “strong” with the country operating “within a stable and predictable institutional framework that provides strong oversight and well-defined arrangements with the UK central government.”
Both agencies cautioned that their ratings could potentially be cut if Scotland moves towards independence.
I’m not sure anyone is desperate for Scotland to be awful at everything just not to blame everything bad on Westminster. Scotland is an amazing country with fantastic people. They had a referendum and made a choice
9 comments
An advantage of the union
Of course it would be.
The UK implicitly guarantees all Scottish (and any sub national) borrowing so the risk associated is the same as it would be in lending the UK.
Although I suspect a few here might like to plainly ignore both Moody and S&Ps warnings about Scotland’s rating on independence while simultaneously celebrating their stated reasoning for Scotland’s (legally obligated) fiscal prudence.
The BBC states:
> More recent analysis by the Scottish government suggests that bonds could offer better value for money under certain circumstances as well as greater flexibility.
However [from the FT](https://www.ft.com/content/37bbedc1-d5a1-4ba9-a975-48ebd7c0508a):
> Despite attracting a credit rating in line with the wider UK, Scotland is likely to have to pay higher interest costs to sell debt compared with those in the UK gilt market.
> That is partly because the new market would be small compared with the £2.5tn in outstanding UK government bonds, making the bonds harder to trade than gilts.
So why sell kilts rather than gilts if it means we’ll be borrowing at a higher cost? For political reasons rather than the move being fiscally interesting:
> “Although it will involve additional costs, Scotland’s profile could be significantly raised in the international capital markets by using existing devolved powers to issue debt,” said the panel, which was co-chaired by the first minister and Angus Macpherson, an investment banker.
> It would allow Scotland to market its investment story through “regular engagement” with investors and building a “track record”, the panel added.
From February 2014
“Even excluding North Sea output and calculating per capita GDP only by looking at onshore income, Scotland would qualify for our highest economic assessment,” said Standard & Poors.
“Higher GDP per capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports creditworthiness.
“We would expect Scotland to benefit from all the attributes of an investment-grade sovereign credit characterised by its wealthy economy (roughly the size of New Zealand’s), high-quality human capital, flexible product and labour markets and transparent institutions.”
Aye mind the ‘too wee. too poor, too….. ‘campaign
Part of U.K. has same credit rating as U.K. shocker.
From the article:
“Both agencies cautioned that their ratings could potentially be cut if Scotland moves towards independence.”
Listening to Radio Scotland this morning and going by the frothing at the mouth from the usual buffoons here who are desperate for Scotland to be awful at everything, you can tell this is excellent news and says so much about the Scottish Government’s “ prudent fiscal management and the country’s economic stability”.
Well done Scottish Government 😀
Moody’s said its rating was based on the Scottish government’s “prudent fiscal management” and the country’s economic stability.
S&P said Scotland’s economy was “strong” with the country operating “within a stable and predictable institutional framework that provides strong oversight and well-defined arrangements with the UK central government.”
Both agencies cautioned that their ratings could potentially be cut if Scotland moves towards independence.
I’m not sure anyone is desperate for Scotland to be awful at everything just not to blame everything bad on Westminster. Scotland is an amazing country with fantastic people. They had a referendum and made a choice
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