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Corruption in Andorra’s Finance Sector Exposed, IMF Report Reveals

Andorra La Vella, April 7, 2022 - A scathing report from the International Monetary Fund (IMF) has exposed widespread corruption and weaknesses in Andorra’s finance sector, highlighting the need for urgent reforms to ensure transparency and accountability.

Key Findings of the IMF Report

• Vulnerabilities in Banking System: Andorra’s banks are vulnerable to significant risks due to their large size, high cost-to-income ratios, and overreliance on foreign funding.
• Lack of Effective Supervision: The Andorran Financial Authority (AFA) has failed to enforce regulations limiting large exposures to less than 25% of the bank’s capital.
• Need for Structural Reforms: To address the challenges facing Andorra, including difficult geographic accessibility, a limited stock of affordable housing, and a small internal market.

Recommendations by the IMF

• Diversify Economy: Reduce reliance on a few economic sectors and neighboring countries to boost growth in the medium-term.
• Boost Investment: Favor access to credit and alternative sources of financing, and ease immigration requirements to attract high-skilled workers.
• Strengthen Economic Governance: Improve the quality and comprehensiveness of data, align anti-corruption framework to international standards, and publish beneficial ownership information.

Response from the IMF

“The mission thanks the authorities and all our counterparts for a constructive policy dialogue, for engaging in a productive and transparent collaboration, and for their hospitality during the first official visit of the IMF to Andorra.” - IMF Spokesperson