If the crisis over investments in Iceland hasn't already made those people who took money out of UK banks to put in Irish banks think again, then nothing will. But the situation also highlights the worries companies must now face if they are too big for the country they are based in, and certainly Lloyds TSB must be bearing this in mind when they decide where the new Lloyds/HBOS group will be based.
Just a few days ago SNP leader Alex Salmond, who was to meet Lloyds executives in Scotland, was talking of the benefits of Lloyds being based in Scotland, and whilst Scotland remains part of the UK, this might be true. However, the real reason many will surmise that Alex Salmond is doing his best to woo Lloyds is because if his party eventually achieves its aims of Scottish independence, Lloyds would pay its corporation tax to a Scottish government, and not to London.
Now in less turbulent times, this would be no concern to Lloyds, but hasn't the Iceland situation changed that view ?
It seems increasingly clear that small countries are unable to sustain banking giants. Would I want my money in a Scottish bank in a future financial crisis ? Could the Scots bail out a giant like Lloyds/HBOS ? That's a question Lloyds executives will have to mull over very carefuly.
2 comments:
"However, the real reason many will surmise that Alex Salmond is doing his best to woo Lloyds is because if his party eventually achieves its aims of Scottish independence, Lloyds would pay its corporation tax to a Scottish government, and not to London."
I know it is very hard for those unsympathetic to the SNP to ascribe anything but the most Machiavellian motive to every move they make, but the dull truth on this occasion is that Salmond is simply trying to act in Scotland's best interests, and to secure the best possible deal for the country he governs. If there has to be a baser political motive, let's say he also wants to be very clearly SEEN to be acting in Scotland's best interests, and can anyone blame him for that?
In fact, he's already as good as accepted that the main headquarters will not be in Scotland - his stated aim is simply to preserve as many jobs and 'headquarter functions' as he possibly can.
I am not saying what Salmond is trying to do is wrong from a Scottish point of view, simply that any bank wanting to relocate to a small country could learn a lot from Iceland.
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