Stable and mature political institutions, although cohesion has weakened following the onset of the economic and financial crisis. High per capita income and a flexible economy, which have contributed to a reduction in external imbalances. Multilateral and bilateral external funding support, despite the electorate's rejection of the Icesave agreement. A relatively undiversified and volatile economy, with the main export sectors subject to supply-side constraints. Still high private sector non-performing loans. Uncertainties related to the lifting of foreign exchange controls imposed after bank failures and currency depreciation in 2008. The ratings on Iceland are constrained by high external and public sector debt burdens that we believe could become heavier still, if not for capital controls limiting both residents' ability to invest
