Banking performance in Andorra, 1931-2007

Authors

  • Marc Galabert Macià Universitat d'Andorra

DOI:

https://doi.org/10.1344/rhi.v26i68.21304

Keywords:

Andorra, banking performance, market structure, offshore financial centre

Abstract

This paper presents a first estimate of the profitability of Andorran banking (return on equity) from its beginnings until 2007. The research suggests, after analysing the main banking aggregates for the country, that the Andorran financial centre acted as a safe haven for foreign capital in times of economic turmoil. After meeting local demand for credit, the excess capital was transferred to the international market, making it possible to obtain higher returns. The study of this new quantitative source permits a first evaluation of the market structure-performance relationship. The evidence suggests that collusive agreements, rather than efficiency, boosted the sector’s profitability in the long term.

Published

2018-01-25

Issue

Section

Articles