{
  "title": "IMF Survey: Wealth Funds' Long-Term View May Help Stabilize Markets",
  "publication": "IMF News, October 16, 2008",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/soint101608a",
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  "summary": "The International Working Group of Sovereign Wealth Funds published the Santiago Principles to help ensure an open international investment environment. IMF Survey online's Simon Willson caught up with IWG co-Chair Hamad Al Suwaidi during the 2008 IMF-World Bank Annual Meetings.",
  "publishDate": "2008-10-16",
  "sections": [
    {
      "heading": "Publication and context",
      "content": "- IMF Survey online interview published October 16, 2008.\n- Interviewee: IWG co-Chair Hamad Al Suwaidi, conducted during the 2008 IMF-World Bank Annual Meetings in Washington, D.C.\n- The International Working Group of Sovereign Wealth Funds (IWG) published October 11 a set of 24 voluntary principles—dubbed the Santiago Principles—designed to ensure an open international investment environment.\n- The IWG was established to meet the request from the IMFC at its 2008 Spring meeting to draft a set of principles; that drafting task ends with the publication of the Santiago Principles."
    },
    {
      "heading": "Key findings and analysis",
      "content": "- Purpose and expected effects of the Santiago Principles:\n  - Publication of the Santiago Principles will enhance understanding of the way in which SWFs (sovereign wealth funds) operate.\n  - Given the voluntary commitment and drafting effort by SWFs, participants are expected to publicly endorse the principles.\n- Compliance and monitoring:\n  - Some of the principles call for certain information to be disclosed, making nonimplementation or noncompliance apparent in a short period of time.\n  - Some SWFs have decided to use independent third parties to confirm compliance with the Santiago Principles.\n  - The IWG is considering the establishment of a permanent representative body for SWFs; part of that body's role would include discussion of implementation of the principles.\n- Stability and investment behavior of SWFs:\n  - SWFs typically take a long-term view on their investments and are seen by some commentators as shock-absorbers in volatile markets.\n  - One of the main principles of SWFs is to invest on an economic and financial risk-and-return basis.\n  - By law these funds will not be able to get involved in noncommercial activity.\n  - The global crisis that was occurring at the time presents \"excellent investment opportunities\" and, given the long-term nature of these funds, some have taken advantage of these opportunities.\n  - Because of their long-term approach, SWFs could find investment options that would add to the stability of markets.\n  - \"By their very nature, SWFs have a big stake in stable global financial markets.\""
    },
    {
      "heading": "Institutional development and host-country relations",
      "content": "- Creation of a standing group / permanent international body:\n  - The IWG started examining the creation of a permanent international body to represent sovereign wealth funds.\n  - The proposed standing group's purpose is to be defined by a formation committee; when terms of reference are set, the body would function more as a forum for interaction than merely an editor of the principles.\n  - The new permanent body for SWFs would be a focal point of contact between wealth funds and recipient countries.\n- Coordination with other organizations:\n  - The IWG is aware of OECD work in this direction and has synchronized activities with the OECD; the IWG and OECD are described as \"two sides of the same coin\" on this issue.\n  - The Santiago Principles are seen as building trust further between host countries and SWFs, with an expectation of a positive reaction from host countries."
    },
    {
      "heading": "Operational implications and next steps",
      "content": "- Monitoring and adjustment:\n  - The IWG will monitor the appropriateness of the principles going forward and make adjustments where necessary.\n  - The formation committee will consider establishment details and terms of reference for a standing group to review the principles and consider other issues.\n- Practical measures taken by SWFs:\n  - Use of independent third parties by some SWFs to confirm compliance with the Santiago Principles.\n\nIMF Survey online interview with IWG co-Chair Hamad Al Suwaidi, October 16, 2008.\n\n---\n\n Content in this bundle\n\n- 022908pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Survey Interview\n- Wealth funds post principles\n- Pact on voluntary principles\n- IMF work on wealth funds\n- IMF Board on wealth funds\n- Norway's model wealth fund\n- Rise of sovereign funds\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/soint101608a"
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    "Published: October 16, 2008",
    "IMF Survey online interview published October 16, 2008.",
    "Interviewee: IWG co-Chair Hamad Al Suwaidi, conducted during the 2008 IMF-World Bank Annual Meetings in Washington, D.C.",
    "The International Working Group of Sovereign Wealth Funds (IWG) published October 11 a set of 24 voluntary principles—dubbed the Santiago Principles—designed to ensure an open international investment environment.",
    "The IWG was established to meet the request from the IMFC at its 2008 Spring meeting to draft a set of principles; that drafting task ends with the publication of the Santiago Principles.",
    "Purpose and expected effects of the Santiago Principles:",
    "Compliance and monitoring:",
    "Stability and investment behavior of SWFs:",
    "Creation of a standing group / permanent international body:",
    "Coordination with other organizations:",
    "Monitoring and adjustment:",
    "Practical measures taken by SWFs:",
    "[022908pdf (PDF)](/-/media/websites/imf/imported/external/np/pp/eng/2008/_022908pdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Survey Interview](https://www.imf.org/en/news/search)",
    "[Wealth funds post principles](https://www.imf.org/external/pubs/ft/survey/so/2008/NEW101508B.htm)",
    "[Pact on voluntary principles](https://www.imf.org/external/pubs/ft/survey/so/2008/NEW090308B.htm)",
    "[IMF work on wealth funds](https://www.imf.org/external/pubs/ft/survey/so/2008/POL03408A.htm)",
    "[IMF Board on wealth funds](https://www.imf.org/external/pubs/ft/survey/so/2008/NEW032108A.htm)",
    "[Norway's model wealth fund](https://www.imf.org/external/pubs/ft/survey/so/2008/POL070908A.htm)",
    "[Rise of sovereign funds](https://www.imf.org/external/pubs/ft/fandd/2007/09/straight.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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