{ "title": "Making Sovereign Wealth Funds Resilient, Responsible, and Ready to meet the challenges of a changing world", "publication": "IMF News, October 29, 2025", "sourceUrl": "https://www.imf.org/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech", "canonical": "https://www.imf.org/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech", "overlayPath": "/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/index.md", "summary": "Keynote Remarks by Yan Liu, General Counsel and Director of the Legal Department, at the 2025 International Forum of Sovereign Wealth Funds Annual Meeting", "publishDate": "2025-10-29", "sections": [ { "heading": "Context and opening", "content": "- Keynote remarks by Yan Liu, General Counsel and Director of the Legal Department, at the 2025 International Forum of Sovereign Wealth Funds Annual Meeting.\n- Event date: October 29, 2025.\n- Speaker background: contributed to the development of the Santiago Principles in 2008; first in‑person participation at IFSWF Annual Meetings in 17 years." }, { "heading": "Annual Meetings takeaways", "content": "- Global growth: \"held steady at about 3% according to the World Economic Outlook.\"\n- Inflation: \"easing, though unevenly across countries.\"\n- Medium‑term growth: \"at historic lows.\"\n- Public debt: \"at historic highs—with global public debt expected to exceed 100% of GDP by 2029.\"\n- Structural shifts highlighted: trade, geopolitics, technology (including the rise of AI).\n- Consequences: greater unpredictability, fragmentation, and risk in the global economy; pressures on independence and credibility of domestic policy institutions." }, { "heading": "Evolution of the sovereign wealth fund landscape", "content": "- Growth in number, scale, and reach:\n - Early 2000s: \"about 40 major funds holding about $2-3 trillion in foreign assets.\"\n - Today: \"more than doubled—with over 100 funds managing a staggering $11-12 trillion depending on the estimates.\"\n- Mandates and objectives:\n - Expanding beyond traditional stabilization and savings roles to support national priorities and industrial policy (economic diversification, climate resilience, infrastructure development).\n- Investment strategies:\n - Shift from publicly traded foreign securities into private markets, direct investments, and co‑investment structures.\n - Drivers: market stress, push for higher returns, tighter scrutiny of cross‑border investments, geopolitical fragmentation.\n - Result: increased domestic investment activity with implications for fiscal frameworks and policy coherence." }, { "heading": "Principles and insights to enhance resilience and effectiveness", "content": "- Clear and internally coherent mandate:\n - Importance: guides legal, policy, and investment decisions.\n - Risk: multiple or non‑traditional objectives (e.g., sustainable development, climate resilience) can create trade‑offs and conflicting priorities.\n- Legal status and governance alignment:\n - Stabilization funds: often accounts managed by central banks, investing in liquid, low‑risk foreign assets.\n - Savings funds: often incorporated entities with institutional oversight and sophisticated asset management systems.\n- Transparency and accountability:\n - Essential to maintain public trust and long‑term discipline.\n - Principle: \"the public has a right to understand how national wealth is being managed.\"" }, { "heading": "Three priority areas for laws, governance, and institutional design", "content": "- Board capacity and legal safeguards:\n - Need for boards able to exercise meaningful oversight.\n - Law should stipulate rigorous eligibility criteria to ensure collective expertise.\n - Specialized Board committees (e.g., audit) are essential.\n- Alignment with fiscal and corporate governance when investing domestically:\n - Greater government involvement in identifying priority sectors increases political and governance risks.\n - Mitigation: adhere to sound fiscal principles, corporate governance standards, and national policies on state ownership to ensure coherence with broader economic objectives.\n- Coordination with macroeconomic policy to manage domestic conversion risks:\n - Large‑scale conversion of foreign exchange receipts into domestic assets can pressure monetary and exchange rate policy and heighten Dutch disease risk.\n - Requirement: strong interagency coordination and mechanisms to ensure currency conversions do not undermine monetary policy." }, { "heading": "How the IMF can support sovereign wealth funds", "content": "- Santiago Principles legacy:\n - Developed in 2008 with the IMF’s close collaboration; remain \"a cornerstone of sound governance\" due to clarity and pragmatism.\n - Need to reflect evolving trends (geopolitics, technology, new investment strategies) and provide targeted operational guidance for implementation.\n- IMF standards, surveillance, and technical assistance:\n - IMF has developed and endorsed standards and codes relevant to sovereign wealth funds, including guidelines on fiscal policy transparency, central bank transparency, foreign reserve management, and financial oversight.\n - Ongoing comprehensive review of surveillance policy to sharpen annual health checks and offer targeted advice on fiscal frameworks, local currency bond markets, central bank independence, financial supervision, and fintech infrastructure.\n- AML/CFT and financial integrity:\n - Robust AML/CFT frameworks support strong internal controls and governance practices, reducing exposure to financial crime.\n - IMF strategy to help member countries strengthen AML/CFT systems.\n- Debt transparency and sovereign debt restructuring:\n - Sovereign wealth funds increasingly active in sovereign finance and domestic debt markets as official development assistance declines.\n - Debt transparency: important both for funds as creditors and for borrowers to maintain credibility and investor confidence.\n - IMF work referenced: published a paper reviewing legislation in 85 borrowing and creditor countries on Legal Foundations of Public Debt Transparency; provides TA to strengthen public debt laws and disclosure practices.\n - For countries with unsustainable debt: \"swift and orderly debt restructurings\" help preserve asset values and reduce uncertainty; IMF supports the Global Sovereign Debt Roundtable and evolving debt restructuring architecture." }, { "heading": "Concluding recommendations and call to action", "content": "- Build an enduring ecosystem anchored in:\n - Clear mandates.\n - Rigorous oversight.\n - Robust transparency.\n - Unwavering accountability.\n - Strong legal frameworks.\n- Emphasis on decisive, collective action to reinforce resilience, integrity, and impact of sovereign wealth funds amid rapid transformation.\n- IMF stance: ready to deepen dialogue and strengthen collaboration with sovereign wealth funds.\n\nKeynote Remarks by Yan Liu — Making Sovereign Wealth Funds Resilient, Responsible, and Ready to meet the challenges of a changing world; October 29, 2025 — https://www.imf.org/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech\n\n---\n\n\n References\n\n- Yan Liu\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech" } ], "bullets": [ "[Markdown version](/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/index.md)", "[Structured JSON version](/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/index.json)", "[Bundle manifest](/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/bundle-manifest.json)", "Published: October 29, 2025", "Keynote remarks by Yan Liu, General Counsel and Director of the Legal Department, at the 2025 International Forum of Sovereign Wealth Funds Annual Meeting.", "Event date: October 29, 2025.", "Speaker background: contributed to the development of the Santiago Principles in 2008; first in‑person participation at IFSWF Annual Meetings in 17 years.", "Global growth: \"held steady at about 3% according to the World Economic Outlook.\"", "Inflation: \"easing, though unevenly across countries.\"", "Medium‑term growth: \"at historic lows.\"", "Public debt: \"at historic highs—with global public debt expected to exceed 100% of GDP by 2029.\"", "Structural shifts highlighted: trade, geopolitics, technology (including the rise of AI).", "Consequences: greater unpredictability, fragmentation, and risk in the global economy; pressures on independence and credibility of domestic policy institutions.", "Growth in number, scale, and reach:", "Mandates and objectives:", "Investment strategies:", "Clear and internally coherent mandate:", "Legal status and governance alignment:", "Transparency and accountability:", "Board capacity and legal safeguards:", "Alignment with fiscal and corporate governance when investing domestically:", "Coordination with macroeconomic policy to manage domestic conversion risks:", "Santiago Principles legacy:", "IMF standards, surveillance, and technical assistance:", "AML/CFT and financial integrity:", "Debt transparency and sovereign debt restructuring:", "Build an enduring ecosystem anchored in:", "Emphasis on decisive, collective action to reinforce resilience, integrity, and impact of sovereign wealth funds amid rapid transformation.", "IMF stance: ready to deepen dialogue and strengthen collaboration with sovereign wealth funds.", "[Yan Liu](https://www.imf.org/en/news/articles/2025/10/29/%E2%80%9Dhttps://www.imf.org/en/About/senior-officials/Bios/yan-liu%E2%80%9D)", "[Speeches](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/index.md", "json": "/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/index.json", "bundleManifest": "/en/news/articles/2025/10/29/sp102925-yl-ifswf-speech/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T04:13:33.986Z" }