Tags: foreign | wealth | funds | rule

Foreign Wealth Funds to Self-Regulate

Wednesday, 03 Sep 2008 09:29 AM

A group of sovereign funds that includes biggies like China, Russia, Singapore and many Middle Eastern oil funds has agreed to agree on their future behavior, but little else is known for now.

Meeting in Santiago, Chile, the International Working Group of Sovereign Wealth Funds (IWG) signed off on a voluntary code of conduct for funds that invest outside their own countries.

The meeting was set up in response to a call from the International Monetary Fund to come up with standard practices for the newly influential investment funds.

Asian and Middle Eastern funds have been bailing out Wall Street firms over the past few months, buying up stakes in them in exchange for quick cash as the mortgage meltdown has torched investment and commercial bank balance sheets. That has made U.S. politicians nervous as well.

Morgan Stanley calculates that such funds sit on $2.51 trillion in investable assets, largely money earned on oil and other exports, much of which is consumed in the United States.

The largest is the United Arab Emirates, at $875 billion. Singapore has $430 billion in public and private funds, while Norway, China, and Saudi Arabia have around $300 billion each.

The full code of practices will be released on Oct. 11 at a meeting of the group scheduled in Washington, D.C.

The group's co-chairs, Hamad al Suwaidi, undersecretary of the Abu Dhabi Department of Finance and a director of the Abu Dhabi Investment Authority, and Jaime Caruana, Counselor and Director of the International Monetary Funds Monetary and Capital Markets Department, release this joint statement:

"We have taken a significant step in Santiago. Within a short span of four months, and through a strong consultative spirit, the IWG has reached a preliminary agreement on a set of voluntary generally accepted principles and practices (GAPP). We expect to present the GAPP framework to the IMFC next month so that the IMF's 185-member countries have an opportunity to review the voluntary principles and practices."

The IWG member countries are: Australia, Azerbaijan, Bahrain, Botswana, Canada, Chile, China, Equatorial Guinea, Iran, Ireland, South Korea, Kuwait, Libya, Mexico, New Zealand, Norway, Qatar, Russia, Singapore, Timor-Leste, Trinidad & Tobago, the United Arab Emirates, and the United States.

Oman, Saudi Arabia, Vietnam, the Organization for Economic Cooperation and Development (OECD), and the World Bank participate as permanent observers.

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A group of sovereign funds that includes biggies like China, Russia, Singapore and many Middle Eastern oil funds has agreed to agree on their future behavior, but little else is known for now.Meeting in Santiago, Chile, the International Working Group of Sovereign Wealth...
foreign,wealth,funds,rule
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2008-29-03
Wednesday, 03 Sep 2008 09:29 AM
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