13 February 2008

Sovereign wealth funds - US Treasury warns against growing protectionism

In a testimony before the Joint Economic Committee, Under Sec McCormick warned that sovereign wealth funds raise potential concerns. “Primary among them is a risk that sovereign wealth funds could provoke a new wave of investment protectionism, which would be very harmful to the U.S. and global economies”, McCormick said.

Treasury has taken a number of steps to help ensure that the United States can continue to benefit from open investment while addressing these potential concerns.

Next to national implementing reforms the Treasury proposed that IMF and the World Bank should develop best practices for sovereign wealth funds, he explained. Also, the OECD should identify best practices for countries that receive foreign government-controlled investment.

Full speech

© Graham Bishop