IMF: SWFs Still Important

Ashby Monk

Karen Remo-Listana of Emirates Business 24 reports that the IMF sees a global role for regional SWFs despite significant losses:

“Deteriorating domestic financial conditions have warranted more prominent roles for SWFs in their home countries…At the same time, SWFs in the region continue to pursue profitable investment opportunities abroad in real estate, retail and finance.”

Nonetheless, the article illustrates the inherent tension between a long term, international focus and a SWFs’ domestic stabilization role:

“The crisis has shown that, notwithstanding their long-term focus, SWFs have a domestic stabilisation role with implications for their investment objectives and strategies, IMF said. In times of financial stress in the domestic economy, SWFs’ domestic investments may temporarily deviate from pure profit maximisation to support broader macroeconomic and financial stabilisation objectives, it added.”

This is a subject of considerable interest for me. In fact, it is the subject of a paper Gordon and I just finished writing. Have a look.

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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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