UK liable for Scotland's banks in a future crisis Both state-backed banks have set up internal teams to study the increased costs a nationalised Scotland would impose on them. High on their agenda is understood to be the implementation of the ring-fencing provision within the existing Finance Bill, and what that would mean for their theoretical UK and Scottish operations and their respective capital requirements. "One thing we're trying to understand is the interplay between ring-fencing and regulation," said a senior source at one of the two banks. Questions remain as to whether both banks would retain their Edinburgh domicile, given a "yes" vote. The SNP said that negotiations would take place on obtaining their share of the assets the UK holds in each bank - despite the fact that the Government would be nursing an approximate £20bn shortfall were its stakes in the pair to be sold immediately. Earlier this year, HM Treasury questioned the future for the banks under a separation - warning that an attempt at shared regulatory arrangements would be "significantly more complex than those that currently exist" and would more than likely increase costs for firms needing to comply with such regulation. Both banks have been careful not to comment in favour of either side of the debate, with Lloyds last night confirming it "believes that questions about Scotland's future constitutional position are a matter for the people of Scotland and the UK and Scottish Parliaments." The SNP's 670-page White Paper, entitled Scotland's Future, includes a pledge to retain sterling as Scotland's currency, through the creation of a Sterling Area similar to the eurozone. The SNP also proposed that the Bank would remain the macroprudential regulator, but that a new conduct authority would be set up, separate from the existing Financial Conduct Authority. Iain McMillan, director of CBI Scotland, said: "The CBI believes that the nations of the UK are stronger together and that Scotland's business and economic interests will be best served by remaining as part of the UK." The Scottish TUC questioned whether an independent Scotland could develop sustainable taxation