JP Morgan sees new Scottish currency initially backed by BoE, ECB - RTRS

After having created a stir in the markets on Wednesday by saying its "base case" forecast now is that Scotland gains independence and introduces its own currency before Britain leaves the European Union in 2019, the New York-based investment banker, JP Morgan, noted today that a Scottish currency in a newly independent Scotland could initially be backed by the ECB and BOE, given their strong mutual interest in ensuring stability there.

JP Morgan economist Malcolm Barr said, "We could imagine a framework where both the ECB and the Bank of England made some small portion of their reserves available to assist in the management of the new currency upon its launch. There could be an initial commitment to try and stabilize the new currency near parity to the pound, with interest rates set by a Scottish central bank above those set by the Bank of England."