This being the case, it will come as no surprise to learn that the Scottish financial sector has grown at a phenomenal rate over the last 10 years to become the fourth largest in Europe.

On a recent visit to the Board of Scottish Financial Enterprise in Edinburgh - a 200-member organisation set up in 1986 to promote and represent the sector - Treasury Minister Angela Knight paid tribute to the achievements of the banks, insurers, fund managers and financial institutions in Scotland, praising the key role they play in the economy of the UK.

Large Changes
Scotland has undergone tremendous changes over the last 30 years or so. Its traditional industrial base of steel-making, shipbuilding, coal mining and textiles has been replaced by oil and gas from the seas off Scotland with manufacturing shifting in emphasis towards the hi-tech industries, such as electronics and information technology systems.

The greatest success story has been Scottish finance. Employment in this sector has expanded by some 40% since 1985 to more than 200,000 - one in 10 of all Scottish jobs - and it now contributes around 15% of Scotland's GDP (gross domestic product), nearly three times the average for the EU.

It looks after over £100 billion of funds for an international clientele and has pioneered portfolio-based savings products and technology-based banking.

Scotland's four major clearing banks had total assets of f96 billion as at December last year and have pioneered cash dispensers, satellite payment systems and electronic banking systems for domestic and business use.

Overseas Development
The Clydesdale Bank has recently established three service centres in Glasgow and Aberdeen to handle financial processing and customer services, while TSB Scotland is investing £15 million in a UK-wide telephone banking centre in Glasgow.

The banks also have an enviable record of success in developing overseas. The Royal Bank of Scotland, for example, operates in Spain, Belgium, Portugal and, most recently, Denmark and the United States through its electronics funds transfer system, developed with its partner, Banco Santander of Spain.

While the long-standing strength of all the banks, both national and international , is in the retail and corporate markets, a significant community of Scottish merchant banks has also developed to reinforce effective service in the corporate sector, increasingly active for both UK and international clients.

Advice on mergers and acquisitions, flotations, venture and development capital is available from a number of sources, each with its own distinctive flavour and specialism.

At the end of 1995, the eight major Scottish life offices had funds of £10 billion , 18.4% of all UK long- term life assurance and pensions business and 24.2% of UK personal pensions business. The sector employs over 20,000 people, a figure which has more than doubled in 10 years. One of the Scottish life offices, Standard Life, is the largest mutual assurance company in Europe.

Great Success
Like the banks, these companies too are developing overseas with great success. Scottish Provident has operations in Spain and Ireland and a subsidiary in Greece; Scottish Widows has a joint-venture life company, Previasa Vida, in Spain; Scottish Equitable operates a 100% - owned specialist cross-border life assurance company in Luxembourg and in Italy it sells shares in SI CAV, an open-ended investment trust company; and Scottish Amicable has established an operation in Dublin to build business in the EU.

Among the composite insurance companies in Scotland, the largest is General Accident, one of the top five insurers in the UK and ranked among the top 30 US property and casualty insurers. A third pillar of the financial community is its specialist fund managers whose portfolio funds under management has grown four- fold in the past 10 years to reach 41 billion.

These managers derive mainly from what were the emerging market funds of the 19th century - the investment trust movement which was a vehicle for collective investment in North America. Today around 25% of these trusts are managed from Scotland, including two of the largest self-managed trusts, the Alliance Trust and the Scottish Investment Trust.

Emerging Markets
Today, the fund managers have diversified, at home and abroad, into different forms of financial vehicles, drawing on other sources of funds most notably mandates from North American pension funds - for management in markets around the world. They have pioneered investment vehicles in such emerging markets as India, Indonesia and Turkey.

A strength of the Scottish financial sector is that it can draw upon a full range of supporting services. These include stockbroking and market making (there is a unit of the London Stock Exchange in Glasgow), private banking, accountancy, global custody, corporate law, performance measurement, financial printing, graphic design and public and investor relations services.

Scotland has the most complete financial business infrastructure in the UK outside London and one which commands nearly 70% of its nationally available market.

The Scottish education system is geared to meeting the needs of the financial sector and remains responsive to them. Telecommunications too has been driven by its requirements. With the first-rate provision which Scotland enjoys, financial business can be conducted to and from anywhere in the world.