The rating published by the evaluators reflects positive expectations generated by the Andorran Government’s negotiations with financial institutions such as the International Monetary Fund as a way to improve the stability of the financial system. The agency also points out that the success of the negotiations for an association agreement with the EU may provide greater and more positive visibility of Andorra abroad. Therefore, the rating could improve again.
The agency alerts the potential risks derived from the size of the country and the weight of the financial system in the economy of the Principality. In this regard, the efforts carried out by the Government in order to improve the control and supervision are welcomed, such as the adoption by the Andorran banks of the International Financial Reporting Standards (IFRS), a comparable accounting and financial policy.
The evaluators mitigate the risks derived from the Andorran banks’ the business models, since the banking sector has adapted its practices to the international norms and standards of transparency. Standard & Poor’s also welcomed the promotion and improvement of risk management policies.