Press Release: New Book Discusses Role of Sovereign Wealth Funds in the Post-Crisis World

May 13, 2011

Press Release No. 11/178
May 13, 2011

Sovereign Wealth Funds (SWF) remain important conduits for the cross border movement of capital and are an integral part of international capital markets. Like other investors, SWFs were affected by the global financial crisis and are reviewing their objectives and asset allocations. What is their role in the post-crisis world where demand for long-term investment funds is expected to continue rising, and the global economy undergoes a process of rebalancing? This is one of many interesting issues covered in a new book “Economics of Sovereign Wealth Funds—Issues for Policymakers,” edited by Udaibir S. Das, Adnan Mazarei, and Han van der Hoorn from the International Monetary Fund (IMF)

In a panel discussion in Beijing on May 12 chaired by John Lipsky, First Deputy Managing Director of the IMF, to formally launch the book, speakers focused on the impact of SWFs on capital flows and capital markets in general, institutional and governance arrangements surrounding SWFs, and the possible role of SWFs in helping mitigate the effects of the financial crisis and contributing to global economic rebalancing. John Lipsky in his remarks said “The establishment of the IFSWF is one of the quiet successes in the recent years”.

Jin Liqun, Chairman of the Board of Supervisors of China Investment Corporation and newly elected Chairman of the International Forum of Sovereign Wealth Fund, expressed strong appreciation for the constructive role of the IMF in providing intellectual support to the work of the IFSWF as shown in the editing and publication of the book. He also highlighted the importance of providing more information to the general public on the roles that SWFs can and could have played both during and after the crisis.

The speakers were of the view that, as long-term investors, SWFs could play a counter-cyclical role in providing global financial and economic stability and that the world needs to understand better the effects that SWFs have both on home and host countries in global economic rebalancing. In this context, they encouraged the IFSWF to play a role in undertaking its research and helping to improve public perceptions about the heterogeneity across SWF operations.

The event was sponsored jointly by the IMF and China Investment Corporation (CIC) and held on the sidelines of the third meeting of the International Forum of Sovereign Wealth Fund in Beijing. Jaime Caruana, General Manager, Bank for International Settlements;Lawrence Lau, Chairman, CIC International (Hong Kong) Co., Limited; Martin Skancke, Director General, Head of the Asset Management Department, Ministry of Finance, Norway; and José Viñals, Financial Counselor and Director, Monetary and Capital Markets Department, IMF also took part in the panel discussion. 80 representatives from think tanks, government agencies, SWFs, private sector, and media attended the book launch.


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