Scotland Using The Pound

[lindapalmara]

I saw something, I think onNewsnight last night, a discussion about Scotland using the pound informally and made a reference to Panama and Ecuador using the Dollar in this way and being thriving economies. How is this so! This wouldn't work for Scotland because they would not have a "Lender of Last Resort". Already, big businesses are pulling out.

[ToraToraTora]

The parallel is valid up to a point, essentially many countries use the dollar unofficially and some officially. They essentially ride on the coat tails of the USs economic policy and as such move with it. Problems arise when the activities of the nation concerned require economic adjustments that they cannot make because they have no control over the currency, QED Ireland in the EU for example. So yes Scotland can adopt the pound but they will be at the mercy of the UKs economic policy shifting and may find themselves in difficulty with things like interest rates and inflation etc. They may also find that the general public of Scotland would prefer to deposit their money in English institutions which won’t help either.

[lindapalmara]

Thank TTT. Never was any good at Economics! Still think they should go back to the Groat!

[Peter Pedant]

Vietnam and Zimbabwe use the Dollar but they are obvious economic basket cases.

They need a central bank and be able to set interest rates which you cant do if the currency is someone else's.

[mikey4444]

Ecuador and Panama ? Aren't they Banana Republics ? Do tropical fruit grow in Scotland ?