Premium
The impact of the global economic crisis on sovereign wealth funds
Author(s) -
Balin Bryan J.
Publication year - 2010
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/j.1467-8411.2010.01246.x
Subject(s) - sovereign wealth fund , scrutiny , global assets under management , portfolio , asset allocation , institutional investor , business , financial system , transparency (behavior) , asset (computer security) , economics , diversification (marketing strategy) , finance , corporate governance , foreign direct investment , political science , macroeconomics , computer security , marketing , computer science , law
This paper analyses the effects of the recent global economic crisis upon sovereign wealth funds (SWFs). Since mid‐2007, SWFs have experienced significant portfolio losses, a decline in fund inflows, and enhanced scrutiny from their own governments. SWFs have been utilised for sovereign stabilisation programs and have helped finance troubled Western banks. SWFs and the IMF have also created a set of best practices known as the Santiago Principles. From these developments, many SWFs have moved to relatively shorter investment time horizons and more liquid holdings, revamped their transparency and management, experienced a temporary improvement in their images, begun to hold controlling stakes in major Western corporations, and have improved their coordination with institutional investors and other SWFs. Going forward, these changes, alongside the relatively strong post‐crisis asset position held by SWFs in comparison to other asset vehicles, make SWFs well‐positioned to play an even more prominent role in global finance.