Banks have
been transferring millions of banknotes from England into Scotland ahead
of tomorrow's referendum amidst fears high demand on cash machines if
the country votes for independence.
It
is still not clear what currency would be used in an independent
Scotland, meaning that some Scots could rush to withdraw as many pounds
as possible in the event of a Yes vote.
In
anticipation of the poll, extra supplies of cash have been moved north
of the border to reassure Scottish account-holders that they will have
access to their money, according to reports.
Alex
Salmond is keen to set up a formal currency union between an
independent Scotland and the rest of the UK, with the pound backed by
the Bank of England as it is now.
But
Westminster politicians have rejected this ambition, insisting that if
Scotland used the pound it would have to be on an informal basis,
without a central bank guaranteeing the country's debts.
This
might lead to an independent Scotland setting up its own separate
currency - leaving Scottish people's savings at risk of being devalued
if the country runs into economic trouble.
As the
polls have tightened over the past few weeks, the value of the pound
has fallen while large companies based in Scotland have seen their
shares dip due to the market uncertainty.
Banking sources told the Independent that
they had transferred additional banknotes into Scotland in case
customers started panicking and withdrawing large amounts of cash.
One
said: 'This forms part of our contingency planning. We are, of course,
monitoring the situation very closely from hour to hour.'
Cash: It is still not known whether or not an independent Scotland would be able to use the pound
Clash: Mark Carney has warned that Alex Salmond's currency plans could lead to tight austerity
Another
insider told the Daily Telegraph: 'It is prudent for banks to stock up
on demand. This happens normally in the run-up to Christmas, and in that
sense the referendum is no different.'
Banknotes
are printed by the Bank of England, but their distribution is
controlled by a small group of institutions including the Post Office,
Barclays, HSBC and the Royal Bank of Scotland.
They have been delivering huge quantities of cash to banks in Scotland so they can stock up at branches and cash machines.
However,
the Bank of England would stand behind the pound in Scotland as well as
the rest of the UK at least until March 2016, when the country is set
to split in the event of a Yes vote.
In
another attempt to reassure banking customers, financial institutions
such as the Royal Bank of Scotland and Lloyds have promised to move
their headquarters to London if Scotland becomes independent, so they
can enjoy the support of the UK Government.
Police presence: Officers pictured guarding a No campaign rally in Glasgow today
Warning: There are fears of potential unrest during and after the referendum vote
A
top City economist has warned that sterling could 'plunge into the
abyss' after independence, as international investors are set to pull
their money out of the UK.
Albert
Edwards, of the French bank Société Générale, said: 'Capital will not
be moving from north of the Scottish border to the south. It will be
moving out of the UK altogether.'
Another
potential danger for Scotland's economy comes from Alex Salmond's
threat to default on the country's share of UK Government debt if
Westminster refuses to enter a currency union
The
National Institute of Economic and Social Research said that such a
move would shut off Scotland from international markets, forcing the
Government to balance its budget immediately.
Flames: A fire-breather at the Yes campaign rally in Glasgow today
Supporter: One follower of the Yes campaign wearing a huge sticker on her face
This would lead to an 'unprecedented degree of austerity and the eventual collapse in the currency regime', the think-tank said.
Mark
Carney, governor of the Bank of England, has predicted that Scotland
would need to build up billions of pounds of capital reserves to
guarantee the national debt if it is not in control of its own currency.
After
the polls began to show Yes gaining on No two weeks ago, sterling fell
to its lowest level all year as investors began to anticipate a
prolonged period of uncertainty.
Shares
in institutions such as RBS, Lloyds and SSE plunged last Monday
following the publication of the first poll to have Yes in the lead.
DAILYMAIL.CO.UK
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