Independent Scotland could bin big banks

I welcome the RBS promise to move to London when Scotland restores its independence. That’s because the UK banking sector is an institutionalised fraud upon the public.

It began with the 1986 Big Bang that did away with banking regulation, giving for-profit banks control over the UK financial system. This cartel of privately owned banks was gifted the privilege of owning the national currency and lending it back to the state as debt, leading to the now familiar cycle of boom and bust. They do this by issuing credit and because they are riskaverse, driven by shareholders’ interest and quick profits, they direct the vast majority of their lending towards low-risk financial assets and property speculation.

These activities do not generate new wealth in the form of goods and services. A mere 6 per cent of the £7.13 trillion total bank lending is business lending. This leads to gross asset price inflation, stagnating productivity, wealth inequality, unemployment and poverty. Former Bank of England Governor Mervyn King said: “Of all the many ways of organising banking, the worst is the one we have today.”

An independent Scotland has an opportunity to build a financial system that prioritises public wealth creation over private greed. We need a network of community banks that lend to small and medium-sized businesses for productive purposes, similar to the 1,500 community banks in Germany. We could end the destructive cycle of boom and bust, reduce inequality, create good well-paid jobs and eliminate poverty.

Au revoir, RBS.

LEAH GUNN BARRETT Merchiston Crescent, Edinburgh