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“Scottish independence, Brexit and a Labour government: those are the three low-probability, high-impact risks for the UK that I can see. If we can avoid these, everything will be fine.”

This is how a French investment banker describes his outlook for the British economy, while waiting for the prizes to be handed out at the Euromoney awards – one of the City’s regular summer bashes.

Financiers at Thursday night’s event and at the British Bankers’ Association annual dinner two days earlier are preoccupied with September’s Scottish independence vote and next May’s general election, which could lead to a plebiscite on a British exit from the EU – or Brexit.

“I am a debt guy, so I always try to look for the downside, but these three risks are all incredibly hard to quantify,” says the London-based managing director of a big Wall Street institution.

His colleague, an Italian based in London for several decades, chips in: “If Labour get into power, I might leave the country, as they are such a bunch of idiots. ”

Other bankers are almost as rude about the coalition. One financier at a big US bank is astonished the way Vince Cable, the Liberal Democrat business secretary, launched a review into the sell-off of state assets this week.

Mr Cable’s surprise announcement, just days before MPs publish a report that is expected to criticise last year’s privatisation of Royal Mail, shows how the coalition partners are drifting apart ahead of the election, he says.

Douglas Flint, Scottish chairman of HSBC, recently told the BBC a vote for independence would be a “tragedy”. He explains he is speaking in a personal capacity but feels so passionately about the issue that it is right for him to speak out.

An investment banker says: “The big banks are all doing an incredible amount of work to prepare for the Scottish issue behind the scenes – but it is so very complicated – with currency risk, deposit flight risk and regulatory risk.”

Another worry for executives stems from the stress tests being carried out by the Bank of England and European Banking Authority to examine lenders’ ability to withstand another financial crisis.

The UK test will assess how the banks would cope with a 35 per cent fall in property prices. A British banker says this is too severe. “Imagine how any other industry would react if you said they had to plan for their main market falling by 35 per cent – they would stop doing business immediately,” he says.

Another European banker says a main concern is that the European tests will yet again be seen as a failure as the regulator does not take into account un-provisioned litigation risks.

The risk is that markets will continue to be worried over the health of the banking sector as the largest banks still face potential multibillion-euro legal bills, highlighted by the fines paid to US regulators this month by France’s BNP Paribas. “Previously they failed to include sovereign debt risk; this time it is litigation.”

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