article: While the City of London tends to grab more headlines, Edinburgh is the UK's second largest financial centre, employing thousands of people in financial services. Where will banks, investors, brokers, lawyers and accountants choose to ply their trade if the UK were split? "If in doubt, people may say they don't want to take the risk - they gravitate to London, where more deals can be done," says Prof Ranald Michie of the University of Durham, a financial historian who has studied the City of London for 35 years. Financial firms have fewer physical constraints to consider compared to a shipyard or a distillery. And they're likely to move to where they can find other companies to provide the advice and services they need, and where they can recruit skilled staff in the greatest abundance, says Prof Michie. Scottish lender Royal Bank of Scotland has said it will move its legal centre to London in the event of a Yes vote, but has no plans to move jobs. Banks like RBS already have large offices in London they can simply nominate as their new head office, says Peter Hahn, a former Citigroup banker who is now a senior lecturer at Cass Business School. "Many of these companies are really run from London anyway." But for Scotland independence could also create opportunities. "What has grown up in Edinburgh is fund management and insurance," says Prof Michie. "For them, the gravitational pull of London is much, much less - Scotland has cheaper rents, cheaper labour. But they have done well tapping business in the UK, so they would need to try to keep that." Edinburgh could create a business environment to suit its strengths and attract more insurers and asset managers, he says. "But it will be difficult to stop other cities and financial centres doing the same." But the City of London stands to gain too in the event of independence, according to Sir Martin Jacomb, former chairman of insurer Prudential and of BZW, Barclays' first foray into investment banking. "London will become somewhat busier than it was before," he says. "Some Scottish businesses and also Scottish people will move." Writer Nicholas Shaxson also thinks the City of London could benefit from an independent Scotland, although by less high-minded means. He is author of Treasure Islands, a book about tax havens. One of the City's big businesses is helping companies and the wealthy pay less tax, he says. "Scottish people have always been vibrant contributors to British democracy, and history has shown that one thing the City doesn't like very much is democratic demands from a big and bolshy populace. "A reduction in the UK population would lessen democratic pressures, somewhat, and make the UK look still more like a tax haven than it already is." An independent government in Edinburgh might decide to keep taxes on the financial sector low as the two cities compete with each other to attract businesses, says Mr Shaxson. The winners either way would be lawyers, accountants and advisers, says Cass Business School lecturer Dr Hahn. This
summary: As Scotland decides whether to become an independent nation, some financiers are asking themselves what this could mean for two of the oldest money centres in the world: London and Edinburgh.