Financial Crime World

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Liechtenstein’s Banking Sector Proves Resilient Amid Global Uncertainties

Stable Economic Development

In a positive assessment of Liechtenstein’s economic landscape, Standard & Poor’s (S&P) has reaffirmed the country’s stable economic development. The ratings agency expects domestic banks to remain resilient in the face of global supply disruptions and rising commodity prices, which will have a direct impact on the export-oriented economy.

Key Factors Contributing to Stability

According to S&P, several key factors contribute to Liechtenstein’s stability:

  • Strong legal framework: Liechtenstein’s efficient political system enables the country to adapt quickly to external challenges through regulatory reforms.
  • Anti-money laundering and tax evasion prevention regulations: The implementation of these regulations over the past decade has been particularly noteworthy, with the Principality emerging as a transparent financial centre.

MONEYVAL Report Confirms Effective AML/CFT System

The latest MONEYVAL report, published in June 2022, confirms Liechtenstein’s effective system for combating money laundering and terrorist financing (AML/CFT), solidifying its position as a reliable financial hub. The banks rated by S&P have demonstrated strong or above-average risk-adjusted capital ratios, indicating their commitment to maintaining robust capitalization and providing high confidence in the domestic banking sector.

Reclassification of Risk Profile

The reclassification of Liechtenstein’s risk profile to Group 2 of the BICRA once again underscores the stability and resilience of the local banking centre. Amidst the current global uncertainties, including the ongoing war in Ukraine, this achievement is particularly noteworthy.

Government Initiatives for Further Strengthening

The Bankers Association sees the government’s decision to initiate accession negotiations with the International Monetary Fund (IMF) as a crucial step towards further strengthening Liechtenstein’s position.

Conclusion

In conclusion, S&P’s assessment of Liechtenstein’s economic development highlights the country’s ability to navigate complex global challenges while maintaining its reputation as a stable and reliable financial centre.