New norms for sovereign funds
The International Monetary Fund said it was stepping up efforts to develop standards for sovereign wealth funds, forecasting they could swell to $10 trillion (Dh36.7 billion) in five years time.
The rising clout of SWFs, or state-owned investment vehicles, in the international monetary and financial system has raised questions about their motives.
Noting the explosive growth in SWFs over the past 10 years to 15 years, the IMF forecast their combined worth would rise to about $6trn to $10trn within five years, from $2trn to $3trn at present.
“The main impetus for the growth of SWFs comes from high oil prices, financial globalisation, and continued imbalances in the global financial system that have resulted in the rapid accumulation of foreign assets by some countries,” said the institution.
The IMF, which has a mission of promoting global financial stability, said it was making progress in establishing best practices for the controversial funds and had “stepped up” its work across a broad range of related issues.
“We’ve been engaged in an initial dialogue with sovereign wealth funds to help identify their practices on issues such as governance and accountability structures, with a view to helping reach a consensus on best practices,” said Adnan Mazarei, of the IMF’s policy development and review department. (AFP)
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