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
"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
"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
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.
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