Market Blues

Author
Terrence Keeley
Content Type
Journal Article
Journal
Foreign Affairs
Volume
87
Issue Number
3
Publication Date
May/June 2008
Institution
Council on Foreign Relations
Abstract
To the Editor: Robert Kimmitt ("Public Footprints in Private Markets," January/February 2008) provides an overview of sovereign wealth funds (SWFs) in the global economy that is helpful but incomplete. His proposed principles for a policy response are well intended but neither workable nor adequate. Kimmitt delineates four kinds of sovereign investment. In fact, there are six. His category of SWFs should be divided into three parts, stabilization funds, state-holding corporations, and future generation, or future welfare, funds. Each of these has different investment horizons, different investment benchmarks, different risk-management frameworks, and different oversight requirements.