Despite the turbulence caused by the BPA money laundering allegations, financial experts and authorities assert that Andorra’s banking system remains secure, stable, and well-insulated against contagion.

According to Miquel Soca, head of fixed-income securities and foreign exchange at Morabanc, the country’s smallest bank, there is little risk of systemic fallout. “Contagion won’t happen,” Soca affirms, “because Spain and France are actively working with Andorra to contain any potential spillover. The Spanish Prime Minister has shown clear commitment by engaging directly with Andorran officials on this issue. More importantly, our banks maintain very high liquidity and solvency ratios, which ensure our resilience.”

Soca also expressed surprise over the abrupt liquidation of Banco de Madrid, a Spanish subsidiary of BPA. “The decision by Spanish authorities to shut it down so quickly is baffling. There were other options available — such as having a larger bank take it over — yet they chose closure. It sends the wrong message, especially when there’s no reason to expect any contagion,” he said, emphasizing that EU-level financial regulations govern the operations of Spanish subsidiaries, offering an additional layer of protection and compliance.

The Association of Andorran Banks (ABA) also released a statement reinforcing that this was an isolated case rather than a systemic issue. “The Fincen investigation clearly indicates that the irregularities at BPA were limited to specific individuals, not a reflection of the entire Andorran banking sector,” a spokesperson said.

“For many years, Andorran banks have adhered to international standards regarding anti-money laundering (AML) and the financing of terrorism, just as banks in the rest of continental Europe do. These protocols are part of our daily operations and compliance obligations. Both international observers and our customers recognize this.”

Despite the reputational impact of the BPA scandal, ABA remains confident that Andorra will emerge stronger. “We believe this event will ultimately highlight the robustness of our system. It’s a challenge, but one we are well-prepared to overcome. The Andorran financial market is solid, compliant, and resilient.