Page last updated at 11:32 GMT, Sunday, 15 March 2009

Salmond defends Scottish banking

Alex Salmond
Alex Salmond called for a return to "prudence" and "canniness"

Scotland's first minister has defended Scottish financial institutions, saying they are not "uniquely responsible" for the current economic crisis.

Alex Salmond told the BBC that Royal Bank of Scotland had made "grievous errors", especially in its purchase of Dutch bank Abn-Amro in 2007.

The first minister said the problems of RBS were an illustration that this was a world financial crisis.

He said much of Scotland's financial sector is doing "extremely well".

Underlying strengths

Mr Salmond said: "While we have got to learn lessons, we have got to remember that Edinburgh and Scotland have a financial sector which stretches into insurance, life management, fund management - a range of institutions, many of whom are doing extremely well and adding to employment at the moment.

"So, while recognising the mistakes that have been made and hopefully doing something about it, particularly in the way that financial sectors are regulated, let's not get ourselves into the situation of believing that every institution has followed these mistakes, because it is just not true."

The SNP leader, who was an economist with Royal Bank of Scotland in the 1980s, said Scotland should be trying to get back to some of the underlying strengths of its financial sector.

He said: "The prudence, the carefulness, the canniness, that took us through some of the previous financial crises so much better than other institutions."

On Saturday, Lib Dem treasury spokesman Vince Cable said the collapse of the Royal Bank of Scotland would have wiped out the budget of an independent Scotland.

The Edinburgh-based bank, which lost £24bn last year, is 68% owned by the UK Government after a massive bail-out.

Mr Cable said the RBS balance sheet was 15 times the size of Scotland's gross national product.

But Mr Salmond said he did believe the current state of the world economy had affected the case for independence.

If you go back in the past then you have to take the revenues as well as the obligations and liabilities
Alex Salmond
First minister

He told the BBC's Sunday AM programme: "RBS in its heyday over the past 10 years was clocking up £4bn a year maximum in corporation tax, which all went to London.

"I'm not defending for a second the grievous errors that the Royal Bank of Scotland made, I am just pointing out that if you take the corporation tax to the London Treasury over the past 10 years, whether it be RBS or HBoS, then it is hardly right to complain about injecting capital as a loan."

He added: "If we'd had over the past 10 years the ability to build up a capital fund through Scotland being independent and controlling oil revenues, and getting the corporation tax, then you would have the sort of capital fund that, for example, Norway has used to stabilise its financial sector.

"If you go back in the past then you have to take the revenues as well as the obligations and liabilities."



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