SERVICES

FINANCIAL SYSTEM

The Andorran financial system is one of the mainstays of Andorran economic activity and compared to other financial centres it is characterised by the high solvency ratio of the banking system, the fruit of a policy of strong capitalisation ever since its beginnings.

Unlike the vast majority of countries, the Principality of Andorra does not have a Central Bank of its own to issue currency and regulate the financial system. The Andorran National Institute of Finance (INAF) is the executive technical organ of financial authority and it supervises and controls the financial entities and has competences similar to those of the supervising bodies of other developed countries.

Andorra does not have its own currency. For this reason, the country has used the euro since 1st January 2002, just like the neighbouring countries of Spain and France, and the currencies of these countries were the main currencies used in Andorra up to then.

The banking system is at the core of the Andorran financial system, with six entities and a network of 55 offices, one for every 1,477 inhabitants. In total, Andorran banking entities hold more than 8,800 million euros in deposits and have an accounts portfolio of more than 5,600 million. Andorra also has a number of insurance companies and other entities specialising in consumer credit and wealth management.

The 1993 Law for the Regulation of the Financial System obliges all financial entities to maintain banking secrecy and to avoid the use of the entities for the laundering of money proceeding from criminal activities. This commitment has been reinforced further by the Law on international cooperation against criminal activity and the fight against money laundering in 2000, which set up a Unit for the Prevention of Money Laundering and which imposes a series of measures against money laundering on all the financial entities. Moreover, in addition to their own system of self-regulation, the financial entities of Andorra have also established international collaboration agreements in this matter.

The credibility and the thoroughness of the Andorran financial system and the development in the offer of financial products and services have allowed significant growth in the activity of this sector over the past number of years and this has been accompanied by a significant increase in employment.