Third, a currency union requires a common fiscal backstop for its central bank. Central banks must be able to act as Lender of Last Resort, both to financial institutions that are solvent but experiencing an unwarranted loss of confidence and to provide bridging finance to institutions that are being recapitalised using new resolution regimes. Under the current governance arrangements in the UK, these operations require an indemnity from, and the approval of, the Chancellor, because they would put substantial public funds at risk. The existing banking union between Scotland and the rest of the United Kingdom has proved durable and efficient. Its foundations include a single prudential supervisor maintaining consistent standards of resilience, a single deposit guarantee scheme backed by the central government, and a common central bank, able to act as Lender of Last Resort across the union, and also backed by the central government. These arrangements help ensure that Scotland can sustain a banking system whose collective balance sheet is substantially larger than its GDP. The euro area has shown the dangers of not having such arrangements, as well as the difficulties of the necessary pooling of sovereignty to build them. An independent Scotland would need to consider carefully how to develop arrangements with the continuing United Kingdom that are both consistent with its sovereignty and sufficient to maintain financial stability. 20  That in turn contributed to the divergence in output growth between core and periphery (chart 8).
Such is our aim in Hong Kong. But this does not mean throwing money into each and every idea which comes along - there’s no point in constructing highways if no-one wants to drive down them. There must be a reasonable business case. On the other hand, no venture no gain. The opening up of a footpath may lead to the emergence of heavy traffic. Thus we have been selective in the initiatives which we support and, although not every project may have been an unqualified success, examples such as our HKD RTGS system which we pioneered in the mid-90s; the CMU which provides such an excellent settlement and custody service for debt securities and which is being linked up with a growing number of overseas counterparties; and the relatively recent USD clearing system; all of these present a strong track record. We are here today to mark another milestone in this infrastructural development - in the field of clearing and payments. Our USD clearing system, introduced in 2000, has demonstrated that a niche exists for services of this type in this part of the world. USD RTGS turnover has grown to about 3,000 transactions a day with a value of some $ billion; and over 1,000 USD cheques are being processed daily. Enquiries and discussions with banks suggested to us that there was also a business case for a roughly parallel service in euro.