Reply #212: Both HBOS and RBS had rights issues around spring this year [View All]

[muriel_volestrangler]

but HBOS was a bit smaller, and (I think, from articles, but I may have this wrong) had been borrowing more from international money markets, and so had been hit harder by the lack of international lending. HBOS has been taken over by Lloyds TSB (assuming it goes through with shareholder approval - look for 'HBOS' in a news search, and you'll get the articles) - in the past 18 months of so, its share price had fallen from about 1100p to under 200p - and in the hours before the takeover was announced, it had fallen below 100p.

All through this, I never heard anyone saying "what happens to Scottish paper notes if they go under", so I think there's something keeping the system OK whatever happens.

Ah - here we are:

Within the United Kingdom, banknotes are also issued by three note-issuing banks in Scotland and by four in Northern Ireland.

These note issues have to be backed pound for pound by Bank of England notes. Owing to the combined size of these issues – well over a billion pounds – it would be cumbersome for the Bank to hold ordinary Bank of England notes as cover. Instead, special one million and one hundred million pound notes - known as Giants and Titans - are used. These notes are not for general circulation. Jersey, Guernsey and the Isle of Man are not part of the United Kingdom and are responsible for issuing their own notes.

http://www.bankofengland.co.uk/banknotes/about/other_notes.htm