Sovereign wealth funds rescue financial markets beauty wants to draw up rules of the game

On the same day that China's state Investment Corporation (CIC) injected 5 billion dollars into Morgan Stanley, the US Treasury said it was trying to draw up "international rules of the game" because it could spark protectionist sentiments and threaten financial stability, because of concerns over national security or other issues. The subprime mortgage crisis has welcomed the US Treasury Department's latest semi-annual report to Congress on 19th that sovereign wealth funds are getting more attention because some Governments, with their rapidly expanding capital, are putting money into higher-paying assets such as equities.　　The report also says the United States is trying to create an "international consensus" against the development of sovereign wealth funds. The US government's aversion and resistance to sovereign wealth funds has weakened as U.S. financial institutions have been hit hard by the subprime crisis and desperately starved of capital.　　As a result, Morgan Stanley became the third top investment bank to fund sovereign wealth funds within one months. Earlier this month, Deputy Treasury secretary Kimmitt said the rapid development of sovereign wealth funds should not be a cause for alarm, as foreign investment created jobs, stimulated innovation, increased productivity and lowered prices.　　With these benefits, the United States reiterates its long-standing commitment to open investment. China's experts believe it is the best time for Chinese financial institutions to invest in the US as financial markets are in turmoil.　　The CIC's stake in Morgan Stanley, not exceeding 10% per cent, was a hedge against the Cfius's prior scrutiny of deals.　　Acknowledging the interest-Kimmitt of sovereign funds, the holders of sovereign wealth funds and the countries that have invested in them should set standards to ensure stability in financial markets. He reiterated U.S. President George W. Bush's call to "optimize" the investment of sovereign wealth funds. He suggested that countries with sovereign wealth fund investments should curb protectionism, (a) fair and transparent investment policies that respect the decisions of investors and equal treatment of investors, while countries holding sovereign wealth funds should invest for commercial rather than political purposes, practise global investment standards, compete fairly with the private sector and promote market stability,　　and comply with the laws and regulations of various countries.　　With the country's shadow, the inherent opacity of sovereign wealth funds has led to speculation and scepticism-a huge amount of money that could have a huge impact on the movements of global financial markets and mergers and acquisitions markets.　　But Paulson, the US Treasury secretary, said in an interview with the first financial daily that they found the fact that almost all financial investments were economic drivers.　　In its report of 19th, the US Treasury also acknowledged that SWFs were usually stable long-term investors and played a positive role in boosting financial stability. The U.S. Foreign Investment Commission has reviewed 207 of the 5 U.S. ports in the United States that have been forced by Congress to abandon the operation of the company's Dubai Port Corporation in a takeover of the British Iron Bank last year.Cross-border mergers and acquisitions of state assets, including 15 deals from 4 Middle Eastern countries.　　Although 3 cases were still under investigation, none were rejected. Still, Kimmitt said earlier this month that sovereign wealth funds ' investments would raise legal questions about national security, the size of the fund and the tendency to be opaque.　　The lack of sound governance and investment management standards for these funds could have a potentially negative impact on global financial stability.　　It is reported that the OECD has made recommendations to the relevant countries of the sovereign wealth fund, the IMF Steering Committee has also asked the relevant agencies to summarize the investment practices of sovereign wealth funds. At present, 22 countries and regions have established sovereign wealth funds. The US Treasury believes the global sovereign wealth fund has reached 1.9 trillion ~2.9 trillion dollars. Of these, CIC's registered capital is 200 billion dollars.