Stable and mature political institutions, although cohesion has weakened following the onset of the economic and financial crisis. Very high per capita income of four times the 'BBB' median and a flexible economy, which have contributed to a swift correction of external imbalances. Strong international funding support and an improved international investment position after the default of the Icelandic banks. High government debt following the collapse of the financial sector in 2008. A relatively undiversified and volatile economy, with the main export sectors subject to supply-side constraints. Risks related to the lifting of capital-account controls imposed after bank failures and currency depreciation, in particular, while negotiations relating to the Icesave bank controversy remain unresolved. The ratings on the Republic of
