Europe's Code for Sovereign Wealth Funds - by Sean O'Grady
The European Union will agree tomorrow on "a set of principles for transparency, predictability and accountability" for Sovereign Wealth Funds, according to the president of the European Commission, José Manuel Barroso. Mr Barroso said that the European approach would be the first step towards a global code. Mr Barroso added that there were "real concerns" about some funds. "We cannot allow non-European funds to be run in an opaque manner or used as an implement of geopolitical strategy," he said.
Two groups of nations have built up Sovereign Wealth Funds. Oil exporters in the Middle East, Norway and Russia have often run such funds for many years. The oldest, the Kuwait Investment Authority, was inaugur-ated in 1953. More recently, Asian nations such as China and Singapore have used SWFs to re-cycle their trade surpluses with Europe and the US. Total funds available to SWFs now total a little over $2,000bn, with estimates that in five years' time, that figure could be over $10 trillion. By comparison, global traded equities are valued at around $28,000bn, and global bonds at $25,000bn.
1 comment:
European state-owned funds are not exactly a model for transparency, either. Maybe it would be more expedient for the EU to fix problems closer to home. See http://thedealsleuth.wordpress.com/2008/02/29/beware-of-litigious-state-owned-banks/
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