Scotland would set up its own financial conduct regulator if it becomes independent from the UK, according to the Scottish government's white paper on independence.
The paper, called Scotland’s Future: your guide to an independent Scotland, also proposed Scotland would have its own competition and consumer protection bodies, including money advice and financial ombudsmen services.
“Much of this landscape is fragmented at the moment, and there is significant scope to deliver this more efficiently in an independent Scotland offering a real opportunity to deliver better outcomes for consumers,” the white paper said.
According to the document, a Scottish conduct regulator would “work on a closely harmonised basis with the UK regulators, delivering an aligned conduct regulatory framework, to retain a broadly integrated market across the Sterling area”.
Scotland would retain use of the pound, the paper said, and the Bank of England would continue to oversee the UK financial system as a whole.
On prudential regulation, the paper said: “Financial stability policy will be conducted on a consistent basis across the Sterling area.”
“This is in line with the proposal of the Fiscal Commission. It is also consistent with international trends, which include the creation of a European Banking Union with the European Central Bank taking responsibility for regulating the largest Euro are banks,” it said.
The paper proposes a shared Sterling area prudential regulatory authority for deposit takers, insurance companies and investment firms as one option.
The white paper sets out plans for Scotland if the independence referendum is passed after the public vote scheduled for 18 September 2014.
