SWFs in the News: Testimony, MAD, and the Top 20

By Brett Keller

The Peterson Institute has posted Edwin Truman’s testimony yesterday before the House Subcommittee on Domestic and International Monetary Policy, Trade and Technology here. You can also download the PDF with tables. The pull-quote:

US authorities should exhaust all multilateral approaches to make the world safe for sovereign wealth funds (SWFs)—in the form of SWF best practices and open financial environments—before turning to any additional, bilateral remedies for concerns that to date are largely imaginary.

Visualizing the 20 Largest SWFs:

From Econompicdata.

“Fan-Fred Turmoil Made Chinese Bankers Nervous,” by Patrick Yoest of Real Time Economics, a Wall Street Journal Blog:

Recent turmoil at mortgage giants Fannie Mae and Freddie Mac sparked major concerns among Chinese bankers before the U.S. guaranteed payment on the firms’ debt, [Brad Setser] told a congressional panel Wednesday.

The testimony was a veritable who’s who of the sovereign wealth funds blogosphere: In addition to Setser, Daniel Drezner testified as well:

Drezner…compared the growing role of sovereign wealth funds and foreign investment in the U.S. to the idea of “mutually-assured destruction” between the U.S. and the Soviet Union during the Cold War…“Mutually-assured destruction can mean a more peaceful co-existence, but it’s a relatively nervous co-existence,” Drezner said.“They can’t see all of their assets wipe away with the blink of an eye,” Drezner said. “They would be equally devastated.”

And Edwin Truman (whose testimony is linked above)

warned of overzealous U.S. regulations against sovereign wealth funds. “My fear is that the financial hurricane that results from an outbreak of financial protectionism over sovereign wealth funds would make recent events feel like a mere squall,” said Edwin M. Truman…

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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