Creation of international reserves and access by the financial system to emergency liquidity assistance

On 24 November 2022, the General Council approved Law 36/2022 on the creation of international reserves and access by the financial system to emergency liquidity assistance.

This law aims to develop an instrument that will make Andorra more resilient in the event of a liquidity shock in the financial sector. It also aims to respond to a need repeatedly identified both by the financial sector and by rating agencies and other international bodies to develop a lender of last resort mechanism that can provide assistance in the form of emergency liquidity for those credit institutions that, despite being solvent, may exceptionally require such temporary liquidity assistance.

The law structures a lender of last resort mechanism based on international reserves that replicates the emergency liquidity assistance model of the European Central Bank, meaning that it meets international standards.