Over and over again we hear from anti-independence campaigers (especially failed former Chancellor Alastair Darling) that an independent Scotland could not have afforded to bail out the Scottish banks. After all, Alastair knows best! He was in charge when they collapsed!
His argument relies on the assertion that banks are bailed out by the taxpayers of the country in which the institution is headquartered. This simply isn't true.
Number 1 Churchill Place, Canary Wharf, London, is the global headquarters of Barclays Bank PLC. If you accept there is such a thing as a Scottish bank then Barclays is clearly an English bank.
At the time of the crash, the media constantly told us that Barclays didn't need a taxpayer bail out at all. But in fact, Barclays Bank - yes, that English based bank - received the single biggest bail out package of any UK bank. It was just that most of it didn't come from the UK taxpayer. Instead, Barclays was bailed out to the tune of £552.32bn (at backdated exchange rates) by the US Federal Reserve and £6bn by the Qatari Government. In other words, foreign governments bailed out Barclays with more than twelve times the money the UK Government gave as capital support for RBS (£45bn).
Why did the US Federal Reserve come to Barclays' rescue if it was not an American bank and so, on the face of it not its responsibility?
The credit crisis provides us with clear evidence that banks are not primarily bailed out by the government of the country hosting their brass plaque. What matters far more is risk of contagion. Banks are bailed out where they have economic assets and business activity, the demise of which would lead to contagion in the local and global financial system. There are numerous examples of this. In the case of Barclays, it fell to the US to support the bank because they were one of the single largest purchasers of US Government debt, so the problem was the US Government's, not the UK taxpayer's alone. The US intervened so that its debt market didn't collapse and to prevent broader consequences for America's economy and society.
For exactly the same reason, the UK Government lent around £7bn to Ireland in 2010. George Osborne told MPs: "We are doing this because it is overwhelmingly in Britain's national interest that we have a stable Irish economy and banking system."
The UK Government bail out of RBS and HBOS amounted to £65bn. That's a lot of money, but the US Federal Reserve made emergency loans available to RBS of £285bn and to HBOS of £115bn. The US bailed out these UK banks too, in the same way as Scottish taxpayers contributed to liquidity support for international banks based in London (including American ones).
Bankers know perfectly well how the system works. When Sir Philip Hampton, chairman of RBS gave evidence to the House of Lords in November 2012, he was quite clear:
"We have used many central banks as a lender of last resort for the many operations that we have in the many jurisdictions in which we operate. That is a key part of what central banks do in the jurisdictions that they control. Just because there might be an independent Scottish Government does not mean that all our lender of last resort facilities would disappear; they would be continued."
Next time you hear someone say an independent Scotland could not have afforded the banking bail out, remember how the US Federal Reserve bailed out Barclays to the tune of £552.32bn. Ask them if they think Scotland would have made the same bank regulation mistakes as the city of London led Westminster government? It is a fact that the contribution of an independent Scotland's taxpayers to any bank bail-out that may or may not have been required in an independent Scotland would have been the same as it has been with Scotland part of the UK.
80% of the peak losses at RBS stemmed from its London-based businesses. The financial crisis shows us that bailing out the banks - like reinsurance - is a risk that is globe in nature and shared between countries, and any tales about Scotland having to accept the burden all by itself are pure myth
Gordon Macintyre-Kemp is the CEO of Business for Scotland - Read MoreSuggest a correction