World Economy

Could Scotland become ‘Frankfurt of the North’?

Scotland could become a financial hub to rival Frankfurt if it builds on its asset management expertise, and could also double its wealth over the next 25 years, a new report claimed on Monday.

N-56, a group representing Scottish businesses, unveiled a strategy aimed at boosting Scottish GDP to £269 billion ($458 billion) by 2037, up from £145 billion in 2012, irrespective of whether the nation votes for independence from the U.K. this September.

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Royal Bank of Scotland headquarters, Edinburgh
John Pavel | Getty Images

One facet of the plan is building on Scotland's expertise in insurance and asset management—it is currently the fourth largest center for fund management in the European Union—to help it to compete with London.

"Scotland's proximity and existing links to London, but with a lower cost base and quality of life proposition, provides a basis for future growth of the sector," said N-56 in the report.

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It steered clear of pushing Edinburgh or Glasgow as a serious rival to London, instead plugging them as a possible equal to Frankfurt, Germany's financial center.

The group said it, "Aims to promote Scotland as the 'Frankfurt of the North', through consistent regulatory and fiscal regimes, fostering financial services innovation through research and development tax credits, and introducing an Apprenticeship system."

Would an independent Scotland be better off?

It also advocated funding Scottish universities to examine how new technologies could "radically" alter the outlook for the financial services sector.

London has remained a pre-eminent global financial center for more than a century, in spite of the turmoil in financial services and scandals following the economic crisis of 2007/08.

However, lower rents and wages, as well as historical location, mean several major U.K. financials are headquartered in Edinburgh, Glasgow or Aberdeen rather than London.

Would Scottish banks move south if Scotland was independent?

Those based in Edinburgh include Royal Bank of Scotland, Standard Life and TSB Bank (divested from Lloyds this month via a stock market offering).

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Tesco Personal Finance, a retail bank wholly owned by the supermarket giant, is also headquartered in Edinburgh, while Aberdeen Asset Management is based in Aberdeen.

Of non-U.K. firms, J.P. Morgan's investor services business for EMEA is based in Edinburgh, while its European technology center is in Glasgow. Morgan Stanley also has an office in Glasgow.

—By CNBC's Katy Barnato