An Independent Scotland's Share of UK Public Debt : Accounting for the Legacy of Quantitative Easing

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Comerford, David (2025) An Independent Scotland's Share of UK Public Debt : Accounting for the Legacy of Quantitative Easing. Preprint / Working Paper. University of Strathclyde, Glasgow.

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Abstract

This paper examines the apportionment of UK public debt in a hypothetical Scottish independence scenario, making 4 contributions: It (1) explains why central bank reserves are a distinct type of liability; (2) shows that by remunerating all reserves at the policy rate, the UK is making a particularly fiscally costly policy choice, and posits that one rationale for this may be to inflate the debt burden Scotland would bear under independence; (3) proposes criteria for a fair division of assets and liabilities; (4) illustrates how Scotland’s and rUK’s post-independence balance sheets could be structured, highlighting implications for monetary–fiscal coordination.

ORCID iDs

Comerford, David ORCID logoORCID: https://orcid.org/0000-0002-5541-736X;
CORE (COnnecting REpositories)