Could Scotland feel the impact of Obama's banking crackdown?

Scotland's financial services industry seems, in theory, a long way from Washington's freshly declared war on Wall Street . But Obama's new tough stance suggests one worrying fact - RBS is not out of the woods yet.

To reiterate, Obama is barring proprietary trading - ie, betting with the banks' own money - within those firms that have a significant retail function. They'll also be forbidden to run hedge funds and making private equity investments.

These exotic practices are not in great evidence north of the border, and so far this is restricted to the US, so why - on a day when most financial stocks slid - did RBS stand out as the biggest European casualty?

For a start, it's one of a handful of European banks with deposits insured by the US Federal Deposit Insurance Corp (FDIC), which means it may immediately face any regulatory changes, according to analysts from Kepler Capital Markets.

Then, there's the issue of its prop trading activities. Although RBS's prop trading is a tiny proportion of trading revenues (5%), Nomura analyst Raul Sinha, says those firms most at risk are those where: "proprietary activities is most integrated into their business models, eg private equity and hedge fund businesses, which are integral to generating revenues for other parts of the firm's activities."

RBS tops his list of those European banks most affected.

The UK government could also swiftly follow Obama's lead, especially if the Conservatives win power at the upcoming general election. If this happens, at very least RBS could face restrictions on some of its more profitable businesses and may cancel any expansion plans.

City AM's editor Alistair Heath suggests that RBS could sell its investment bank to an overseas player, and possibly move trading and hedge fund operations elsewhere.

On one hand, moving away from the supermarket style bank could benefit jobs north of the border - RBS would be forced to focus on making its retail, commercial and corporate functions work.

One the other, losing some of its key profit drivers may, in fact, mean its restructuring programme gets cuts even deeper, and Scotland will inevitably suffer.