A Blueprint for Sovereign Wealth Fund Best Practices
Edwin M. Truman, Peterson Institute
Peterson Institute for International Economics, Washington, DC
April 1, 2008
The Institute hosted a meeting April 1, 2008, to discuss the phenomenon of sovereign wealth funds (SWFs) and their policy implications for both the United States and the world economy. A new policy brief on the topic, by senior fellow Edwin M. Truman, was released at the meeting. The policy brief contains Truman's updated "scoreboard" on the performance of a wide range of sovereign wealth funds and examines use of the "scoreboard" as a framework for the IMF-led effort to establish a set of best practices for such funds.
Sovereign wealth funds have recently become a central feature of the international financial system and world economy. SWFs number more than 40 and hold more than $4 trillion in international assets. Due to their size and rapid growth, policymakers in capital importing countries, like the United States, and elsewhere are raising questions about the possible political orientation of their investments as well as their potential impacts on financial markets.
Edwin M. Truman has been a senior fellow at the Institute since early 2001 after completing more than 25 years of distinguished public service. He was director of the International Division of the Federal Reserve Board under chairmen Paul Volcker and Alan Greenspan, functioning as their chief advisor on the whole range of international financial issues and crises. He completed his official career by serving as assistant secretary of the Treasury for International Affairs during the last two years of the Clinton administration. His previous books for the Institute include Reforming the IMF for the 21st Century (2006), Chasing Dirty Money: The Fight Against Money Laundering (2004), and Inflation Targeting in the World Economy (2003).