Should Sovereign Wealth Funds Be Regulated?

Petrodollars, commodity riches and large national reserves from export-led economies have fuelled the growth of sovereign wealth funds and with it, debate about the transparency and investment objectives of the governments that run them. From China to Norway to Abu Dhabi, sovereign wealth funds now account for approximately 1.3 percent of the world’s financial assets, prompting calls for regulation and oversight in order to protect sensitive industries, such as national security companies, and ensure ethical investments.

On December 6, Brookings Global Economy and Development hosted a discussion on sovereign wealth funds and the issues surrounding potential regulation. As part of the discussion, McKinsey Global Institute and Standard Chartered presented findings from recent reports on sovereign wealth funds. Panelists included Martin Baily, Senior Fellow, Brookings; Lael Brainard, Vice President and Director, and holder of the Bernard L. Schwartz Chair in International Economics, Brookings Global Economy and Development; Diana Farrell, Director, McKinsey Global Institute; and Gerard Lyons, Chief Economist, Standard Chartered Bank.

Diana Farrell’s work has appeared in academic journals and books and on the op-ed pages of leading international publications. She is a member of the Council on Foreign Relations, the Bretton Woods Committee, and the Pacific Council on International Policy. Dr. Gerard Lyons has nineteen years experience in senior roles with leading financial institutions and as a highly regarded City and international economist with an excellent forecasting record. Previously, he served as chief economist at DKB International and as consultant to the Dai-Ichi Kangyo Bank.