Friday, October 19, 2012

Banking Union and the United Kingdom

If the BBC talks about leaving the EU over banking union, then you know you've hit a nerve. The key concern is that the euro zone will develop its own identity within Europe, and that will be bad for Britain's banks. What this says between the lines is that the prospect of a shift change in the tenor and content of banking regulation in the EU might be more than the City of London can stand.

It's conceivable that the English might vote to exit, deciding they have had enough, and are better suited to a partnership with the EU rather than membership. But if they do that, it's also conceivable that the Scots will vote to exit the UK to stick with the EU. The Prime Minister will have to think about that potential cost.

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