"The euro area is now beginning to rectify its institutional shortcomings, but further, very significant steps must be taken to expand the sharing of risks and pooling of fiscal resources. In short, a durable, successful currency union requires some ceding of national sovereignty."
- Mark Carney, BoE Governor
Amid heating debates over Scotland's independence the BoE Governor Mark Carney has made a first visit to the north of the borders since taking office in July. According to the latest poll, conducted by the ICM, around 46% of the population will vote in favour of Scotland's independence during the referendum scheduled for September 18, 2014. While the number of independence supporters is constantly rising, it is still far away from the 50% winning post.
During a speech in Edinburgh Carney made it clear he was not looking to be either in favour or against the independence, and pledged the BoE will implement whichever agreement that will be decided by the two governments. However, he also pointed out the country will have to give up some of its national sovereignty if it wants too keep the Pound, or they will face risks of the neighbouring Eurozone economy, which are representing serious threat for having a currency union. While it seems the Bank of England is open for negotiations, Carney warned that they will have to develop complex agreements on tight fiscal rules and a closer banking union. At the same time, in case of tensions or disputes the Sterling can plummet against other currencies amid the uncertainty, surrounding Scotland's independence.
© Dukascopy Bank SA