ABSTRACT
The Scottish banks, now five in number, form a distinct regional group of banks within the British banking system. There is a considerable overlapping of ownership between the English and Scottish banks. Two of the Scottish banks, the British Linen Bank and the Clydesdale Bank, are wholly owned by English banks—by Barclays and the Midland respectively. Another English bank, Lloyds, has a very substantial minority interest in the National Commercial Bank of Scotland. On the other hand one Scottish bank, the Royal Bank of Scotland, owns the two English banks of Williams Deacons and Glyn Mills and Company. Only the Bank of Scotland, the oldest of the Scottish banks, is without connections of ownership with one or other of the London Clearing banks. But with or without these connections all the Scottish banks operate as distinct bodies with full powers of independent action. They are not confined to Scotland, either legally or practically. They all have offices in London which carry on an important volume of business; but elsewhere, if we ignore the English subsidiaries of the Royal Bank, their interests as joint-stock bankers are negligible. Within Scotland they have the field of joint-stock banking to themselves; there they compete with one another to about the same extent as the English banks within their domain. This regional separateness does not amount to any degree of monetary separation. The British monetary system is a completely unified one, controlled by a single authority; the Scottish banks are an integral part of the system and as subject to the forces and policies that control it as any other domestic banks. But the fact that they exist as a distinct group of banks is there and should command the interest of all who study the British money and banking system. If there were nothing more to it than a matter of banking geography it would still be of great importance to examine the operations of a group of banks which serves one-tenth of the country’s population and disposes of about the same proportion of domestic banking funds. But the interest goes beyond this. The Scottish banks have a long history of separate development behind them; and although in this century this development has increasingly converged with that of English banking, differences of practice and outlook remain. At some points these differences are important: for example, where they condition the relations of the Scottish banks to the mechanisms of monetary policy. But they also invest the Scottish banks with an individuality which gives them their own place within the wider family of sterling area institutions.
