The big news, obviously, is the collapse of RBS as an independent entity, now that the government is going to pump in as much as £20bn and take 60% of the company. In the long-run this is probably a good deal for taxpayers. At least in as much as that 60% ought to bring a return once (if) healthier times return.
Still, it is a stunning fall from grace for RBS. And for Scotland. The financial implications are one thing, so too the political and, just as importantly, the psychological impact. It's not a coincidence that Alex Salmond was always quite happy to let folk know he had once been an oil economist at RBS. Equally, the battle between RBS and the Bank of Scotland to buy the English giant Natwest was a significant moment in modern corporate and psycho-political history. This was Scotland ascendant. Confident. On the march. No more would Scottish firms be snapped up by foreign or English predators, instead they would be sailing the high seas looking for bootie themselves. In the new global economy, distance didn't matter so much and Scottish firms could compete with their London and international peers. Oh, heady day!
True, the Bank of Scotland was forced into an unhappy- and, as it proved, dangerous - forced marriage with Halifax once it lost the battle for NatWest to its Edinburgh rival. But at least the HBOS HQ was, at least notionally, in Edinburgh. And anyway, there was RBS sailing off into the distance. Heck, their American interests alone made them one of the top ten banks in the US. Then there was a deal with the Bank of China. The bank's ambitions new no boundaries. RBS was a whale; a high-roller wlecome anywhere there was mone to be made. The fifth largest bank in the world, according to some measures.
And then there was ABN-Amro. RBS initially wanted the Dutch giant's American operations. But those had been promised to Bank of America. So RBS, confident in its ability to do, well, anything, switched targets and decided to carve-up what remained in alliance with Fortis and Santander. The cost? £49bn. Even some of the tough guys at RBS's Gogarburn HQ blinked once or twice before swallowing this.
And it has been a disaster. Unravelling and restichting ANB-AMRO has proved hideously expensive and complicated. Add this to the dangers of the bank's exposure to "toxic debt" in America and there's a cocktail too bitter for anyone to swallow. Perhaps RBS could have survived one or other of these calamities. But not both. The shareprice fell 90% in a year. Even a successful rights issue - the largest ever - couldn't make much of a difference.
So here we are. (Note too, that Fortis, an ABN-Amro co-conspirator, has also been nationalised.) What's going to happen next? Well, one consequence of this, I suspect, is that it has made a referendum on Scottish independence in 2010 less likely. Not because I think that an independent Scotland would necessarily have been wiped out by recent events, but because confidence matters enormously and confidence has taken a hell of a beating lately. What's more, if the UK government controls two of the country's most significant financial institutions, I suspect there are plenty of people who will not wish to upset anything or take on fresh risk for a while yet. That is to say, the mood may not be so favourable to the nationalists as it has been recently. The status quo may not be so intolerable either, not while the UK acts as the gurantor of last resorts, just as it did, in effect, back in 1707 in the aftermath of the Darien fiasco.
Where will it all end? Whae can tell? But there's a new tune all of a sudden.