NatWest hints at its own bankruptcy? Saying it might have to exit the stage in the Scottish play

The bank formerly known as RBS, now called NatWest Bank PLC, has announced that if Scotland votes to leave the UK, it will move to London

Britain’s NatWest would move its headquarters out of Scotland in the event of a vote in favour of independence, its CEO Alison Rose said, only days before parliamentary elections there. State-backed NatWest (NWG.L), which until last year was called Royal Bank of Scotland, has been based for 294 years in the Scottish capital Edinburgh.

The reason, something to do with a anti-business culture in an independent Scotland?

“In the event that there was independence for Scotland our balance sheet would be too big for an independent Scottish economy. And so we would move our registered headquarters, in the event of independence, to London,” Rose told reporters.

This is presumably not meant to be a threat from the majority (c.59%) State-owned bank or playing politics. For a bit of context, the RBS Group changed its name recently to NatWest Group plc with a view to (I presume) burying the RBS brand and plunging a stake through its heart after its unfortunate recent history. NatWest was an English bank acquired by RBS as it ballooned before bursting I have no doubt that the Chief Executive did not say, and did not mean to say

‘our balance sheet would be too big for an independent Scottish economy if we go bust again.‘.

But the latter is what I am hearing. An implicit admission that the bank risks insolvency, and would expect to be bailed out by the UK government at taxpayers’ expense again. The assumption that the bank is at risk of bankruptcy runs through this announcement like letters in a stick of rock.

So England, Wales and Northern Ireland will be the lucky recipient of all these (theoretical) liabilities.

No true Scotsman should fear independence if it means the departure of this fiscal UXB and its liabilities, a chilly modern-day Darién scheme without the disease and bugs.

But why on Earth should anyone in any country want to receive such a cuckoo in the financial nest? It sounds to me that if the bank were utterly worthless, that would be an improvement. Do we need any more evidence of the perils of fractional reserve banking?