Clearly, with the permanent removal of the capital controls (I’ll say more on this in a minute) and the elimination of ELA at the end of the year for our commercial banks, that would give another notch up in ratings, plus perhaps an overshooting of the target primary surplus - first evidence from Q1 suggest that this may reach 5% of GDP this year (from a target of 3.5%) and/or a better-than-expected growth performance due say to another record of tourist arrivals, etc.
The supervisory review process for assessing capital adequacy, and the overall supervisory frameworks for early identification of vulnerabilities also failed because of complex interconnectedness between financial institutions and markets which was difficult to understand without robust macro-prudential supervision. The disclosures envisaged in Pillar 3 also proved to be insufficient in the light of the complexity of financial instruments and the information asymmetries generated.