Scotland has about the same population as Norway or Ireland — 5.4 million — not Montenegro (0.62 million). GDP on the order of US $245Bn, 40-50 times higher than Montenegro. (And, geographically, 70% of the land area of England).

Politely, you might want to check your assumptions: I submit that if Norway can run a currency, or Ireland (which joined the Euro after running its own free-floating currency for multiple decades) then Scotland should be able to.

* The Scottish economy is about 50x larger than Montenegro, so "fairly small" is relative. Similar-sized Denmark, Sweden and Norway have their own currency, let alone tiny Iceland.

* The EU and ECB aren't particularly happy that Montenegro is using the Euro without being a member anyway...(see your wiki link)

Scotland already has three banks issuing their own bank notes (backed by GBP on deposit in their vaults). Independence wouldn't change that, except that the names on the notes would have to be changed from Pounds Stirling.

Those banks also have access to the Bank of England as a lender of last resort and the international market's backing for the UK's current economic policy. Scotland has a fairly developed financial sector, the currency issue is a lot more complicated than "pick one".

Pegging your currency to another when you don't have the fundamentals to match it tends to be of interest to George Soros, especially when you don't have much in the way of foreign currency reserves to defend it.

> Those banks also have access to the Bank of England as a lender of last resort

Can you imagine a future where the independent Scottish government could arrange a similar deal with another financial institution, to cover them until ECB took on the role?

> Pegging your currency to another when you don't have the fundamentals to match it tends to be of interest to George Soros

When was Black Wednesday for Montenegro?

Given that the European Central Bank doesn't act as a lender of last resort for individual banks (and really doesn't like being for the Eurozone, cf Greece) it isn't going to step in to cover Scotland. So you're either looking at another Government or perhaps one of the massive re-insurers, can you imagine what the insurance premiums would be on that arrangement?

The much more likely alternative is that the Bank of Scotland and Royal Bank move their HQ to London. Standard Life (and therefore Aberdeen Asset Management) probably as well. Not all their staff will move, but their profits will and some highly paid staff will go. That will in turn have an impact on the nascent FinTech sector.

> the European Central Bank doesn't act as a lender of last resort for individual banks

I do think they'd buy independent Scottish treasury bonds & then the independent Scottish government can use the proceeds for emergency lending. Isn't this how the German banks are covered?

If Scotland were in the Eurozone yes. Getting them to do that while applying to join, while also potentially giving none too subtle nods and winks that you don't actually intend ever adopting the Euro is stretching credibility.

OK! I understand your point.

Bulgarian or Bosnian currencies as well as many central African ones are pegged to Euro since the times of German mark and French frank. And suggered no "Sorosian" attack so far.

Small correction: the money is backed by GBP in Bank of England vaults (sent from Scotland). That would have to be transferred north if Scotland decides to create a National Bank.

>Independence wouldn't change that, except that the names on the notes would have to be changed from Pounds Stirling.

Pounds Sterling.

Stirling is a city in Scotland.

wow, a typo

the joke is they'd also have to be changed from that

Yeah, maybe they'll rename it pounds stirling. :)