Andorra says it is to create a so-called “bad bank” out of discredited and dissolved Banca Privada d’Andorra.
The US Treasury Department says it is a channel for the laundering of profits for criminal gangs, and the Andorran authorities have spent the last two weeks trying to sort the good from bad, or illegal assets, with the help of PriceWaterhouseCoopers.
Future options include selling assets, a total or partial return to operations, or a liquidation as Andorra seeks to save its reputation as a banking centre.
All BPA’s illicit assets will be held in the bad bank. BPA matters to Andorra, as alone it represents about a fifth of all assets and liabilities in the banking system.