Jersey and Guernsey have had their long-term credit ratings cut by Standard & Poor’s Ratings Service, with both jurisdictions being lowered from AA+ to AA.

The changes reflect concerns about increasing regulatory complexity and demands, with the ratings agency citing the G-10 group of countries’ focus on low-tax regimes.

S&P has also given a negative outlook to both of the UK Crown dependencies to reflect potential further risks to their economies and external positions should Britain vote to leave the European Union in a referendum to be held either this year or in 2017.

The news was greeted with some dismay in Jersey and Guernsey, which have economies heavily focused on offshore financial services, and in some sectors they compete with Bermuda.

Alan Maclean, Jersey’s treasury and resources minister, said: “While we understand that credit-rating agencies are liable to take a particularly risk-averse view, we are disappointed with this recalibration exercise.

“It is good that Jersey has retained one of the highest possible ratings but we do not accept the rationale behind the change. The European Commissioner for economic and financial affairs, taxation and customs, Pierre Moscovici, recently declared us to be an ‘important partner’ in the fight against tax evasion, fraud and abusive tax avoidance. Our standards of regulation and transparency are justly recognised to be very high.

“The rating does not reflect a decline in our economy or a worsening of our position.”

And regarding the agency’s worries about Britain possibly pulling out of the EU, he said: “Their opinion around the likelihood of Brexit, for example, is not within our control, and there are many speculative views on that issue. I have every confidence that our economy will continue to grow, regardless of the outcome of that referendum.”

In a statement, the Jersey government noted that its rating remains one of the highest possible, and its short-term rating of A-1+, the highest possible, remained unchanged. It noted that S&P’s had conducted the recalibration to address concerns that small sovereign states were receiving the same rating as larger countries.

The statement continued: “This view reflects S&P’s assumption that smaller countries are more susceptible to global economic factors.”

Meanwhile in Guernsey, Gavin St Pier, treasury and resources minister, said: “Standard & Poor’s appears not to have recognised the important point that Guernsey is outside the EU for most purposes and already has an established third-country relationship on financial services.”

He added: “We have made the case, and as a jurisdiction have actively demonstrated, that Guernsey is supportive of the EU and OECD anti-base erosion and profit-shifting agenda, meets every international standard of tax transparency and financial regulation, and has a finance sector based on expertise rather than tax avoidance or regulatory arbitrage.”

Bermuda was given its most recent ratings change by S&P last April when the agency lowered the island’s long-term issuer credit and senior unsecured debt ratings to A+ from AA-. At the same time the agency lowered Bermuda’s short term rating from A-1+ to A-1.