The ratings agency’s report was published the same day as insurer Standard Life indicated it would consider relocating its Edinburgh headquarters if Scotland voted ‘yes’ in the referendum on independence later this year.

S&P describes the Scottish financial sector as ‘unusually large’, with total assets estimated at 12.5 times GDP. The report states: ‘We would therefore likely view the financial sector as a significant contingent risk to the state. At the same time, a large part of this activity could be re-domiciled to the UK.’

If that does happen, then S&P argues that a smaller financial services sector might help improve the country's sovereign credit rating by reducing the size of the economy's external balance sheet and reducing its liabilities. However, an independent Scotland would have a shrinking economy if financial services, which account for 8% of GDP, do relocate and it might have to consider cutting the size of its public sector workforce, which S&P said accounted for nearly a quarter of its total workforce.

The ratings agency says successful agreement on Scotland's membership of a monetary union negotiated with either the UK or the eurozone would provide considerable support for the rating on a sovereign Scotland.

Alternatively, S&P says a decision by a sovereign Scotland to issue its own new and untested currency or to unilaterally adopt the currency of another sovereign--without gaining access to that currency's lender of last resort--could pose some initial risks to external financing. It says Scotland would be hard-pressed, under a new currency regime, ‘to quickly replicate the deep capital markets it enjoys today as part of the larger UK’.

However, the report concludes: ‘Nevertheless, with a GDP (including North Sea oil output) only slightly below that of New Zealand, a developed economy and developed financial system, there is no fundamental reason why Scotland could not successfully float a currency.’