LONDON (Standard&Poor's) Oct. 22, 2001--Standard&Poor's today revised its outlook on the Republic of Iceland to negative from stable. At the same time, the ratings on Iceland were affirmed, including the double-'A'-plus/'A-1'-plus local currency and the single-'A'-plus/'A-1'-plus foreign currency issuer credit ratings. The outlook revision reflects a weakening in general government debt ratios and heightened risks in the domestic financial sector, which could reverse the progress in fiscal consolidation achieved since the mid-1990s. The credit-driven economic expansion that had started in 1996 is now coming to an end, at a time when the external economic environment has deteriorated markedly. This could potentially lead to an extended period of subpar growth and deteriorating asset quality in the banking
