LORNE Crerar, one of Scotland's leading authorities on banking law, has defended the SNP's controversial plan to remain within the UK financial regulatory system under independence.
Despite claims from the UK Government of "intellectual confusion", Crerar, professor of banking law at Glasgow University and chairman of Harper Macleod solicitors, said it would make "a lot of sense" for Scotland to stay within the UK framework even
if it won political and fiscal independence.
He told Scotland on Sunday there would be little point in the Scottish Government building a separate regulatory system in Scotland when the UK regime is among the best in the world.
"When you have a highly sophisticated regulatory environment why try to replicate it? Why reinvent the wheel?" he said.
Crerar argues that financial firms based in Scotland but doing business in the City of London would be regulated under the UK system anyway so it would be fruitless to create a separate layer of regulation.
Earlier this year, Finance Minister John Swinney moved to allay fears in financial circles about the potential damage to the industry of moving away from the UK-wide system, admitting that maintaining a unified framework is "one option".
But the director of one leading business group, who asked not to be named, said he could not see how the proposal would work. "Would Scotland still adhere to interest rates set by the Bank of England even though the Monetary Policy Committee would be setting them with the English and Welsh economies in mind?" he asked. "It would be like French companies being regulated by the City of London."
