S&P ratings highlight offshore vulnerability

The downgrade reflects the recent revision of S&P's sovereign rating methodology that places heavier weight on a sovereign's own external vulnerabilities and monetary flexibility, even when that sovereign largely uses the currency of a larger sovereign and has limited external data, such as balance-of-payment and international investment position data. In both cases, S&P points out that the offshore financial sector will remain the main engine of growth and identifies a favorable macroeconomic policy mix of the use of British pound sterling and fiscal surpluses, as well as tax ...