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Interesting Links for 29-02-2012

Original post on Dreamwidth - there are comment count unavailable comments there.

Or just do mortgages in Groats. It's not that hard* to have different accounts do different currencies.

*Ok, yes, probably a few million in setup costs if you're not already doing them in pounds, euros, dollars, etc.

Except that the lending banks have probably borrowed in Sterling.

Somewhere in here somebody has a currency exposure.

True but very few mortgages run the full term nowadays. It is very easy to change mortgage providers, and many people do every few years.

And we're not talking about setting up a currency overnight. It will take at least 5 years from any referendum to actual independence, and probably a good few more years to setup a new currency so there will be plenty of time for banks and individuals to sort themselves out.

This is true - plenty of time for everyone to adjust and I think you're right, most will.

I wonder aloud tho - if I were selling a house, with a mortgage in sterling if I'd want to be paid in sterling and not take a currency risk on the transaction. Maybe.

Absolutely, there will be some currency risk which someone will have to bear. It will almost certainly fall onto the borrower - the banks are not daft enough to let it fall the other way around.

If there were specifically English and Scottish banks who treated the other country as being as foreign as mainly Europe, this would be very bad. It can be very expensive/difficult for customers in the UK to have foreign currency bank accounts. And if you don't have a foreign currency bank accounts, making/getting payments in currency can involve unpleasant charges.

I was going to have to pay a charge of approximately four times the amount that I actually wanted to pay in order to pay a small cancellation charge for a German hotel booking until I managed to get my Dad (who lives in France) to pay it for me from his Euro-denominated account there.

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