The old Royal Bank of Scotland headquarters stands in one of the great houses of Edinburgh. Dundas Mansion dominates the eastern end of George Street, the city’s richest boulevard. Its high, domed ceiling of brilliant blue, with gold-lined stars letting in the light, speaks of aspiration and ambition. Outside, a towering statue carries the lifesize figure of Sir Henry Dundas, 1st Viscount Melville, whose political dynasty ruled Scotland for 50 years in the 18th and 19th centuries. It speaks of power.

That power, and that sense of tradition, runs through Scottish history. The Royal Bank, and its principal rival the Bank of Scotland, have been, for more than 300 years, pillars of the Scottish financial world, setting their stamp on almost every venture that the nation has been involved in, from the first attempts to establish a trading outpost on the Darién peninsula, in Panama, to their solid backing of Scotland’s imperial ventures in the service of the British Empire.

Today those pillars are crumbling. The takeover of the Bank of Scotland and its Halifax partner will finally mean the loss of its Scottish headquarters, and, inevitably, the draining away of jobs, branches and status. The once mighty RBS, its share price shaky, now confronts the real possibility that it too will lose its independence.

For the international world the fate of these two banks is just another symptom of the financial maelstrom. For Scotland it is a body blow. The role that they play, not just in business but in the cultural profile of the nation, is hard to quantify, but it touches almost every aspect of life, from the till to the touchline. Sponsors of the arts and sporting life, employers of nearly 50,000 people, involved with almost every small and medium-sized company in the land, they account for 7 per cent of the country’s GDP. From the moment you descend from your aircraft at Edinburgh airport, with the RBS logos running down the steps, you are aware that this is a banking capital.

Their money is invested, not only in property and businesses, but helps to support the arts and almost every sporting event worth the name. The banks have insisted on maintaining their headquarters in Scotland and their commitment to the nation.

Five years ago RBS moved its headquarters from the city centre to the outskirts, where a massive new complex has been built, employing 3,250 people. The Bank of Scotland, despite its amalgamation with the Halifax, to become HBOS, has announced plans for a major new development in the Fountainbridge area of the city, and still maintains its impossibly grand, Baroque building on the Mound as a museum of banking and a symbol of financial might.

Quite what will emerge from the present turmoil is hard to predict. But no one doubts that if these once impregnable institutions lose their Scottish base the whole nation will be the poorer. With headquarters goes a commitment to the nation’s culture and status. Edinburgh, one of the half-dozen most important financial centres in Europe, would be reduced to just another British city. And Scotland, with its history of banking prowess, would suffer a draining of talent, prestige and power.

We must hope that it will never happen. But there were long faces in the brasseries and bars of George Street last night.

Times Recommends

• It’s the beginning of the affair
• Afghanistan: still a price worth paying
• Heroes of the downtrodden