While the island has retained one of the highest ratings issued by the organisation, it has been subject to a rating change.
The agency confirms this is not reflective of Jersey’s current position but is based on potential future uncertainties, such as the UK EU Referendum and increased regulatory demands.
In 2015, S&P similarly reduced the UK Government’s rating due to the prospect of a UK exit from the EU.
Geoff Cook, CEO Jersey Finance, said: “Our AA rating is still one of the highest ratings available and reflects the enduring strengths of our finance industry. This change will have no economic impact on Jersey. We are pleased that S&P acknowledges Jersey's track record of complying with international transparency standards and anti-money laundering initiatives.
They also confirm that our traditionally strong budgetary controls and proactive policies have enabled the government to weather a period of weak growth with only modest fiscal cost, supported by significant fiscal savings. They confirm Jersey will preserve its high living standards, and say the rating reflects our wealthy economy and healthy financial position, underpinned by low debt and a high net general government asset position.
While we recognise the potential impact political and economic factors may have on international investors and businesses, we are confident we have and continue to take appropriate measures to mitigate concerns, such as those arising from a possible UK exit from the EU and further regulatory demands.
Regarding ‘Brexit’, Jersey has an ongoing dialogue with EU institutions and the UK Government to ensure the island’s interests in Europe are promoted fairly and effectively. Far from detracting from the EU, the island adds value through Jersey funds investing in the continent and has not been adversely affected by its non-EU status over the last 50 years.
With regards to regulation, Jersey has been endorsed by respected agencies such as the IMF, which found the island to be a ‘top division of IFC’, the OECD, which praised the jurisdiction’s role in shaping the transparency agenda, and the World Bank, which cited Jersey as an example of best practice in fighting international crime. We have a robust track record of adapting to new regulation and as a result are more than well-placed to meet any future challenges arising from regulatory complexity. We are confident that Jersey’s finance sector, which is driven by its expertise and strong record in supporting global capital flows to the benefit of the global economy, will continue to thrive whatever regulators decide is appropriate.
Political and regulatory developments, to some degree, will always remain out of our control but our long-time standing as a jurisdiction of substance will undoubtedly place us in a prime position to weather any challenges effectively.”
The credit rating process is repeated annually with an update every six months.