Sovereign Wealth Funds

     Sovereign Wealth Funds
                                                                                                  60442
      Sans Poverty
      North American Affairs News
                                                                                worldbank.org

      March 2008 | Issue 13                                                     IDA


      Sovereign Wealth Funds
      As Simon Johnson, Director of Research for the IMF
      writes, "sovereign wealth funds are a fairly new name
      for something that's been around for quite a while:
      assets held by governments in another country's
      currency. All countries have foreign exchange reserves (typically
      in dollars, euros, or yen). When a country, by running a current
      account surplus, accumulates more reserves than it feels it needs for At a Glance: Sovereign
      immediate purposes, it can create a sovereign fund to manage those Investments
      resources."                                                           Partnerships
                                                                            - services and information
      According to Johnson, the size of SWFs worldwide has increased        from the World Bank
      dramatically over the past 10­15 years: he estimates that sovereign Treasury.
      funds held, at most, $500 billion in 1990, while today's total is
      around $2­3 trillion, enroute to reach $10 trillion by 2012. More > > Mark Your Calendar

      While the World Bank Group is not engaged in the policy                   March 10-11 :
      debate on SWFs at this time, the Bank's Treasury does                     Oil Price Volatility,
      offer technical assistance to SWFs, through its                           Economic Impacts, and
      Reserves Advisory and Management Program (RAMP)                           Financial Management:
                                                                                Risk-Management
      Countries benefiting from windfall profits-whether from commodities       Experience, Best Practice,
      or the sale of other national assets-may allocate a portion of these      and Outlook,
      revenues into a long-term investment fund, typically for both income      Washington D.C.
      and intergenerational wealth transfer. RAMP supports these efforts
      typically through modeling fund rules and simulating various              March 16: Shared Growth
      outcomes to help ascertain the robustness of the plan. In addition,       and Job Creation in Africa:
      RAMP supports the investment management process through                   Engines and Barriers,
      assistance in developing and implementing an appropriate asset            Oxford
      allocation strategy--either via external asset managers and/or in-
      house management. In addition, Treasury practitioners assist in           March 24-April 4:
      developing specialist skills in accounting, legal advisory, information   Accelerating Progress
      technology and internal audit to support fund management activities.      Towards the Health
       More > >                                                                 Millennium Development
                                                                                Goals (MDGs) and other
      As of today, the World Bank Treasury's Sovereign                          Health Outcomes,
      Investments Partnerships works with approximately 30                      Washington, D.C.
      clients. These clients, which span all major regions, comprise
      central banks, national pension funds, national oil funds and
      government owned banks. Of the first six countries to join in 2001-       Ask an Expert: Send us
      2, all have graduated from the program with a strong record of            your question for a World
      results in effecting institutional change. More > >                       Bank Expert and we'll find
                                                                                and publish the answer.

                           Questions? Comments? Please email us.




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