Sovereign Wealth Funds

Pages 8 (2008 words)
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Sovereign Wealth Fund or SWFs is a well known and not so recent international financial strategy which involves the investment of national foreign currency reserve on foreign markets with little or no regard to where the currency originates. The IMF's October 2007 Global Financial Stability Report states that there are five major types of SWFs namely; the stabilization funds, savings funds for future generations, reserve investment corporations, development funds and contingent pension reserve funds, where each serve a distinctive and well defined purpose.


This process has resulted in a well recognized trend in monetary trade, foreign currency policy, and new international finance strategies. But, much debate subsists on the legitimacy of these policies and their ethical parameters. There are considerable economic and social issues associated to fairness of competition and possible political non-commercial hidden agenda, which come to the surface seriously. Various institutions are starting to feel greatly concerned by the issue of SWFs especially because these investments are taking considerable proportions.
While many countries are facing important turnabouts and recession in their economy others are continuously sustaining their considerable economic rise. ...
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