Carney: RBS might have to leave independent Scotland

Governor of the Bank of England Mark Carney has warned that there is a "distinct possibility" that the Royal Bank of Scotland would have to move outside of Scotland in the event of a vote for independence.

Speaking to MPs on the Treasury select committee, Mr Carney said European laws require banks to have their head offices in the same member state as their registered offices. Asked if RBS would have to move to the remaining UK if voters backed independence, he said:

Bank of England governor Mark Carney will today face a grilling by MPs over claims that some of its officials knew about the alleged practice of foreign exchange rate-fixing.

Mr Carney is due to appear before the Treasury Select Committee just days after the Bank suspended an employee over compliance concerns following an internal probe.

More: Carney to answer questions on currency union

Governor of the Bank of England Mark Carney will meet with the Treasury Select Committee to answer questions on the "economics of currency unions" amid debate over the possible implications of a Scottish vote for independence.

Chancellor George Osborne has already ruled out a currency union between an independent Scotland and the rest of the UK.

First Minister Alex Salmond's Scottish Government wants to create a "sterling zone" with the rest of the UK if there is a Yes vote in the break-away referendum.

Mr Carney said in a speech in January that an effective currency union would force a newly-independent Scotland to hand over some national sovereignty in a similar way to how this is done in the eurozone.

"Any arrangement to retain sterling in an independent Scotland would need to be negotiated between the Westminster and Scottish parliaments," he said. "The Bank of England would implement whatever monetary arrangements were put in place."

More: Salmond not facing up to weaknesses on sterling row