English translation, original article by Marc Roche.
ANXIETY IN THE SCOTTISH FINANCIAL SECTOR
"Battered by wind, soaked by rain, buried under the icy mist that rolls in off the sea": Robert Louis Stevenson's 19th Century description of his hometown of Edinburgh has never been so true. Britain's second largest business centre, after London, and ninth largest in Europe is being hit hard by the credit crunch. The gloom in Edinburgh is being felt across Scotland.
For the people of Edinburgh, their beautiful and classic city is home to three spectacular monuments dating from the great days of the old kingdom, now a nation, after being a British province for so long: The Black castle of the Stuarts dominating the Royal Mile, the historic headquarters of the Bank of Scotland in the old town and the glass and steel sky scraper of the Royal Bank of Scotland near the airport.
But these powerful symbols are deceptive. HBOS, which now includes the Bank of Scotland, has merger with Lloyds to create the Lloyds Banking Group- the huge London based organisation now 43% state owned. Also under state guardianship is RBS, a shadow of the former universal bank it once was.
Moreover, the fall in markets and the lack of new investment spells dramatic carnage for the insurance and fund management sectors- the two other mainstays of local finance. Professional advisers are also suffering.
Given the current shortage of business, Edinburgh is no longer a port of call for ‘roadshows' attracting large global organisations.
To cheer each other up, the golden boys have abandoned the champagne, of which sales are poor, and are making do with a hot toddy. Two big spoonfuls of sugar, boiling water and as much whisky as you can knock back and you recover from the stormy times of the mortgage crisis quicker than you would from any nasty cold!
Scotland is feeling the fall even more given its significant contribution to financial glory. Its economists- led by Adam Smith- shaped liberalism, the building block of British capitalist expansion and its main player - the city of London. With savers on the brink of being taxed by greed and cruelty the raw money masters invented the bank overdraft, bank notes and insurance.
If Queen Victoria managed to conquer India, step foot in China, dip her toe in central Asia and go to Australia, it was largely thanks to the knowhow and cold bloodedness of this hyperborean nation's finance experts. Jardin, Mattheson, Fleming and Swire, as well lessons learnt from abroad such as the Hong Kong and Shanghai Corporation, now known as HSBC, enabled Britain to feature at the pantheon of imperial conquest.
In order to explain this fantastic period, historian Niall Ferguson underlines Scottish philosophers' dominance in his recent best seller, The Ascent of Money. In the Age of Enlightenment they shrewdly mixed practical ways with free thinking, rationality with irrationality and Calvinism with materialism.
The current financial crisis is sending a shudder down the spine of a population who have won small battles but lost all the big ones. Niall Ferguson explains that the Act of union in 1707 acted to unite Scotland and the hereditary enemy, England, thus killing off Edinburgh's patricians- the very same people who had financed the creation of a colony at the border between Panama and Columbia, in the impenetrable area of the Darien Gap. The success of jobs in the financial sector has done a lot to give Scotland an identity that, under the guardianship of London, which saw them take power over North Sea oil, they had been made to lose.
Owen Kelly, CEO of The Scottish Financial Enterprise, the representative body for the financial services in Scotland, does not believe in fatal predictions such as the type made by Macbeth's witches in the cold of night: "It's a global crisis. In the long-term, our knowhow, our history and our openness to the world constitute great assets."
Scotland has always known how to react when bad luck forces it to change. Edinburgh could, for example, draw inspiration from Aberdeen's redevelopment model. The Granite City has succeeded in its transformation of hydrocarbons and become a recognised world centre for oil and marine engineering. To get out of the rut, the plan from now on north of Hadrian's Wall is to place greater importance on jobs linked to the financial sector such as specialist research or risk analysis on exotic financial products.
Through the eyes of businessmen, the nationalisation of banks, which the majority are completely against, has put the ghost of independence, called for by the SNP, to bed. Cities once held in high esteem by SNP, Iceland and Ireland, hit hardest by the credit crunch, now serve as an example.
But as Robert Louis Stevenson once pointed out, from the deep Pacific, even in Edinburgh, after the rain comes a rainbow.