Look to Belgium for inspiration on setting up a central bank

While agreeing that the Bank of Scotland was set up through an Act of the Scottish Parliament, prior to the Act of Union, and remains the only commercial establishment in existence to have been set up by that Scottish Government, it is today a private commercial concern.

In actual fact it was made a subsidiary of the Lloyds Banking Group in 2009. Lloyds is an English bank founded in Birmingham in 1765. As such it could not be given control over Scottish economic policy as the Bank of England presently has over the English government’s financial matters.

Besides which, the Bank of Scotland is one of those closing down small branches – even in places like Cambuslang. Closure of country branches is one of the things we need to find a way of combatting, and a bank that does things in a slightly different way is what’s needed.

That’s why I suggested that it might somehow cater for customers of other banks by receiving deposits from them to transfer into their own bank that may be miles away in one of the bigger town centres. Withdrawals need not be a great problem, as there could be an ATM installed inside each of those branches. Anyone with a card can use any ATM at any bank to make withdrawals. Visiting them at regular intervals to fill them might a problem; as would transfer of cash to a central bank somewhere.

I briefly mentioned Credit Commercial from Belgium in my letter of April 13 and I would want to see a Scottish National Bank set up along the lines of how I am informed that bank operates. It is run as a commercial concern but is fully owned and operated by the Belgian Government. I understand that the board of governors that runs the bank is made up from members of national, local, and regional government. The representation is entirely cross-party and those serving on the board must first qualify by holding an appropriate government position, then be nominated and, finally, selected for the job. Directors serve for a set period and are then replaced. As I understand it, there are representatives from all the different sections of the Belgian Governmental system, even allowing for representatives of each of the languages spoken in Belgium. I believe that’s French, German, and Walloon. This cross-party balance negates party political manipulation.

I suppose, in a way, the sort of establishment I would be hoping for is something like the Post Office Savings Bank used to be before it was de-nationalised. We need to have something that can be small enough to operate in small local communities, but also large enough to deal with national matters.

To this end, I would once again revert to what I remember and consider the smallest branch of the Post Office that used to be beside the railway station at Achnasheen and was no bigger than a garden shed (is it still there?), and then compare that to some of the larger “Crown Offices” like the one that used to stand at the North end of the North Bridge in Edinburgh. It could also have the side benefits of handling business other than strictly “banking business” to help

make it more economically sustainable. Like selling stamps and postal orders, just like the Post Office today.

Maybe a re-nationalisation and reorganisation of the Post Office (after we get independence) might fit the bill. Now, I haven’t read the “Paying our Way” report from Common Weal, but it seems to me that the sort of system mentioned by Peter Ryan, the author of that report, might be the pattern for a physical, in-person system that could be set up for such a bank. I don’t know.

As Peter Ryan states in the letter before Paul Gilchrist’s letter, “banking and finance are complex subjects”. Nevertheless, I believe Scotland has the ingenuity to find a way to implement a suitable banking system.

Charlie Kerr
Glenrothes