Originally published 12 February 2009
Guernsey has received a top credit rating from Standard & Poor's.
The world's foremost provider of independent credit ratings and data has this month assigned 'AAA' long-term and 'A+1' short-term sovereign credit ratings to the Island.
This places Guernsey alongside the likes of the UK, US, France and Germany in the top 25 of more than 120 rated jurisdictions in the world and ahead of Japan as well as competitor international finance centres such as Bermuda, Hong Kong and Malta.
"Guernsey receiving this top credit rating from such a respected authority provides important independent evidence that the Island is financially very sound," said Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the Island's finance industry.
"Significantly it puts us on a par with much larger jurisdictions such as the UK and the US and shows we are in a stronger position than some of the other jurisdictions that we compete with as international finance centres. This report sends out the message that Guernsey is safe, secure and stable."
Standard & Poor's said that the ratings reflected "a very robust fiscal position, based on sound fiscal policies."
There is recognition of the challenge for the Island's finances in the short-term by the introduction of the zero-10 tax package (where there is a standard rate of zero tax for corporate entities, except banks which are levied at 10% on certain activity) and subdued economic activity. However, the analysts expect Guernsey's fiscal position to be maintained over the medium term.
Treasury and Resources Minister Charles Parkinson said that the S&P assessment would help to prepare the Island's Government for borrowing but no decision had been made on sources of funding for future major capital projects.
The report notes that Guernsey's tax levels are low, even compared with peer economies; praises the Government's foresight in building up reserves; and notes that per capita income at US$53,485 is ahead of the AAA average and slightly higher than similar jurisdictions such as the Isle of Man, Andorra and Singapore.
Mr Niven added: "Over the last 50 years Guernsey has established itself as one of the leading international finance centres, playing host to hundreds of service providers supplying a range of banking, funds, fiduciary and insurance products and services to a global client base. Our success has its foundations in being able to provide a competitive and stable economic environment and S&P's report reaffirms that the Island will be able to continue to provide this offering well into the future."
Standard & Poor's is the market leader in sovereign ratings. Jurisdictions seek a rating primarily to unlock funding in cross-border markets but ratings have also become an important element in debt exchanges, fostering a deeper local capital market, foreign direct investment and private sector access to global capital markets.
Ratings and the published research related to them also play an important role in supporting greater public sector financial transparency.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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