The regulation of Sovereign wealth funds: The virtues of going slow

University of Chicago Law Review

Volumn 76, Issue 1, 2009, Pages 111-134

  Epstein, Richard A ^a,b,c   Rose, Amanda M ^d  

^a James Parker Hall Distinguished Service ^*  (United States)

^b UNIVERSITY OF CHICAGO   (United States)

^c STANFORD UNIVERSITY   (United States)

^d VANDERBILT UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 66249104351     PISSN: 00419494     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (101)

1. Lawrence Summers, Sovereign Funds Shake the Logic of Capitalism, Fin Times 11 (July 30,2007).
2. Christopher Cox, The Rise of Sovereign Business, Gauer Distinguished Lecture in Law and Policy at the American Enterprise Institute Legal Center for the Public Interest (Dec 5, 2007), online at http://sec.gov/news/speech/2007/spch120507cc.htm (visited Jan 11, 2009).
3. Jeffrey Garten, How to Live with the Reality of State Capitalism, Fm Times 17 (Jan 15, 2008).
4. Ronald J. Gilson and Curtis J. Milhaupt, Sovereign Wealth Funds and Corporate Governance: A Minimalist Response to the New Mercantilism, 60 Stan L Rev 1345, 1346 (2008) (examining the rise of sovereign wealth funds and proposing a "vote suspension" for equity positions taken by these funds).
5. See text accompanying notes 33-35.
6. See text accompanying note 38.
7. See Table 2.
8. The fiscal deficit of the United States and its dependence on foreign oil have contributed significantly to the growth of SWFs. See text accompanying notes 10-12.
9. For a more detailed account of the increasing power and prominence of SWFs, see Gilson and Milhaupt, 60 Stan L Rev at 1354-59 (cited in note 4) (discussing the shift from a relatively small number of conservative SWFs to the current mass of active investment SWFs);
10. Paul Rose, Sovereigns As Shareholders 87 NC L Rev 101, 103-06 (2008) (describing the growth in SWF assets). For alternative definitions of SWFs,
11. see Mark Allen and Jaime Caruana, eds, Sovereign Wealth Funds-A Work Agenda 26-27, 37 (IMF Feb 29, 2008), online at http://www.imf org/ external/np/pp/eng/2008/022908.pdf (visited Jan 11, 2009).
12. See Ashby H.B. Monk, Recasting the Sovereign Wealth Fund Debate: Trust, Legitimacy, and Governance *9 (Working Papers in Employment, Work, and Finance WPG08-14, May 2008), online at http://ssrn.com/abstract= 1134862 (visited Jan 11, 2009) (describing the uses of SWFs to avert inflationary pressure from commodity prices and diversify wealth).
13. See also generally Christine Ebrahim-zadeh, Dutch Disease: Too Much Wealth Managed Unwisely, 40 Fin & Dev 50 (Mar 2003), online at http://www.imf.org/external/pubs/ft/fandd/2003/03/ebra.htm (visited Jan 11, 2009) (defining "Dutch disease" as the damaging changes in terms of trade that can accompany rapid increases in wealth based on commodity exploitation).
14. See Arvind Subramanian and Aaditya Mattoo, Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organization *12-13 (Center for Global Development Working Paper No 12, Feb 2008), online at http://ssm.corn/abstract-1131402 (visited Jan 11, 2009) (arguing that the increase in SWF coffers is due in part to exchange rate manipulation by Asian central banks). This trend has recently, at least temporarily, reversed.
15. See Joanna Slater, States Play Currency Defense-Russia, South Korea Intervene to Stem Weakness vs. Dollar, Wall St J A9 (Sept 11, 2008) (reporting that falling commodity prices have led some governments with SWFs, including Russia, to spend reserves to shore up domestic currencies).
16. See Simon Johnson, The Rise of Sovereign Wealth Funds, 44 Fin & Dev 56, 56 (Sept 2007) (describing the dramatic growth of SWFs from their inception in the 1950s).
17. See also Edwin M. Truman, A Blueprint for Sovereign Wealth Fund Best Practices *2 (Peterson Institute for International Economics Policy Brief No PB08-3, Apr 2008), online at http://www.petersoninstitute.org/ publications/pb/pb08-3.pdf (visited Jan 11, 2009) (listing information for thirty-three SWFs totaling $2.9 trillion in size).
18. See Rose, 87 NC L Rev at 209 (cited in note 9).
19. Department of the Treasury, Report to Congress on International Economic and Exchange Rate Policies: Appendix 2: Sovereign Wealth Funds 1-2 (Dec 2007), online at http://www.ustreas.gov/ offices/international-affairs/ economic-exchange-rates/pdf/Dec-2007 Appendix2.pdf (visited Jan 11, 2009).
20. See Krzysztof I. Rybinski and Urszula Sowa, Global Reserves Management *5-20 (May 2007), online at http://ssrn.com/abstract=985071 (visited Jan 11, 2009) (calculating the opportunity cost of "too conservative" reserve management by central banks).
21. See Ian Traynor, Sovereign Wealth Funds Likened to Gazprom As Brussels Calls for Rules; Commission Asks SWFs for Greater Openness: Fears of Growing Wealth Wielded for Political Aims, Guardian (London) 28 (Feb 28, 2008).
22. See Edward Lucas, The New Cold War: Putin's Russia and the Threat to the West ch 7 (Palgrave 2008) (describing the roots of Gazprom's influence in Europe).
23. Gilson and Milhaupt, 60 Stan L Rev at 1367 (cited in note 4).
24. Remarks by Acting Under Secretary for International Affairs Clay Lowery on Sovereign Wealth Funds and the International Financial System (June 21, 2007), online at http://www.treas.gov/ press/releases/hp471.htm (visited Jan 11, 2009) (discussing both the benefits and the risks attributable to the increased power of SWFs).
25. IMF Survey Online, IMF Intensifies Work on Sovereign Wealth Funds, IMF Survey Mag (Mar 4, 2008), online at http://www.imf.org/external/pubs/ft/ survey/so/2008/POL03408A.htm (visited Jan 11,2009) (quoting the IMF's First Deputy Managing Director John Lipsky).
26. Securities Exchange Act of 1934 ("Exchange Act"), Pub L No 73-291,48 Stat 881, codified at 15 USC §78a et seq.
27. 15 USC §78m(d)(1); 17 CFR §240.13d-101.
28. See Cornelia Hammer, Peter Kunzel, and Iva Petrova, Sovereign Wealth Funds: Current Institutional and Operational Practices 7-8, 13 (IWG Secretariat Sept 15, 2008), online at http:// www.imf org/external/pubs/ft/wp/ 2008/wp08254.pdf (visited Jan 11, 2009) (reporting the findings of a survey of twenty countries with SWFs and noting the relative diversity of operational structures, styles, and goals for the SWFs).
29. See Arild Stimmen, Transparency and Trust: Keys to the Norwegian Pension Fund (Norway Jan 24, 2008), online at http://www.norway.org/policy/ gpf/norwegian+pension+fund+global.htm (visited Jan 11, 2009) (providing an overview of the Norwegian SWF's governance structure).
30. For example, SWF investments in US banks would trigger the same scrutiny as any other investment. See Turmoil in the U.S. Credit Markets: Examining the U.S. Regulatory Framework for Assessing Sovereign Investments, Hearing before the Senate Committee on Banking, Housing, and Urban Affairs, 110th Cong, 2d Sess (Apr 24, 2008) (testimony of Scott G. Alvarez, General Counsel, Board of Governors of the Federal Reserve System), online at http://www.federalreserve. gov/newsevents/testimony/alvarez20080424a.htm (visited Jan 11, 2009).
31. Cox, The Rise of Sovereign Business (cited in note 2).
32. See, for example, Federal Aviation Act of 1958 §101, Pub L No 85-726, 72 Stat 731, 737-38;
33. Atomic Energy Act of 1954 §103(d), Pub L No 83-703, 68 Stat 919, 937, codified at 42 USC §2133;
34. See also Michael Hagan and Heidi Johanns, Sovereign Wealth Funds: Risks, Rewards, Regulation and the Emerging Cross-border Paradigm, 8 M&A J 1, 5 (June 2008) (providing an overview of current SWF oversight in the United States and examining various regulatory proposals for increasing SWF regulation).
35. The Foreign Investment and National Security Act of 2007 §3, Pub L No 11049, 121 Stat 246, 252, codified at 50 Appx USCA §2170(k) (establishing CFIUS by statute and instituting annual reporting requirements). Technically, FINSA amends the 1988 Exon-Florio Amendment, officially known as the Omnibus Trade and Competitiveness Act of 1988 §5021, Pub L No 100418, 102 Stat 1107, 1425-26, which itself amended the Defense Production Act of 1950, Pub L No 81-774, 64 Stat 798. Exon-Florio authorizes the president to suspend or prohibit transactions that could result in foreign control of US companies based on national security concerns; the president has delegated the job of reviewing individual transactions to CFIUS
36. Department of the Treasury, Regulations Pertaining to Mergers, Acquisitions, and Takeovers by Foreign Persons, 73 Fed Reg 21861, 21862 (2008) (explaining FINSA and the CFIUS oversight process). Proposed regulations implementing FINSA define "control" broadly as the power, direct or indirect, whether or not exercised, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity.
37. Id at 21869 (emphasis added).
38. Id at 21862.
39. 50 App USCA §2170(d)(2).
40. For a more extensive description of the CFIUS review process, see Rose, 87 NC L Rev at 126-30 (cited in note 9). For a description of comparable regimes in other nations, see Government Accountability Office, Foreign Investment: Laws and Policies Regulating Foreign Investment in 10 Countries, GAO-08-320, 3-21 (Feb 2008), online at http://gao.gov/new.items/d08320.pdf (visited Jan 11, 2009).
41. See, for example, Joshua Aizenman and Reuven Glick, Sovereign Wealth Funds: Stumbling Blocks or Stepping Stones to Financial Globalization? 2-3 (Federal Reserve Board of San Francisco Economic Letter No 2007-38, Dec 14, 2007), online at http://www.frbsf.org/publications/ economics/letter/2007/ el2007-38.pdf (visited Jan 11, 2009) (describing the rise of SWFs and the fears that SWFs will destabilize the global economy and advocating that SWFs invest in diversified global equities to prevent destabilization).
42. Although Professors Gilson and Milhaupt view this as a "minimalist" approach, see Gilson and Milhaupt, 60 Stan L Rev at 1346, 1352 (cited in note 4), others have pointed out that it "negates the essential nature of equity investment" Rose, 87 NC L Rev at 139 (cited in note 9).
43. See also Truman, A Blueprint for Sovereign Wealth Fund Best Practices at 12 (cited in note 12) (observing that this approach, if applied uniformly in the United States, would "disenfranchise as much as several triUion dollars of investments by U.S. state and local government pension funds").
44. See Truman, A Blueprint for Sovereign Wealth Fund Best Practices at 13 (cited in note 12) (noting that some observers have suggested that SWFs not take controlling stakes except in real estate projects where control is essential).
45. See Evan Bayh, Time for Sovereign Wealth Rules, Wall St J A26 (Feb 13, 2008);
46. Service Employees International Union, Sovereign Wealth Funds and Private Equity: Increased Access, Decreased Transparency 8-9 (Apr 2008), online at http://www.behindthebuyouts.org/storage/ Sovereign%20Wealth%20Funds%20and%20Private%20Equity%20Final%20Report%20April% 202008.pdf (visited Jan 11, 2009).
47. See Bertrand Benoit, Berlin's Takeover Defence Fund Plan Faces Collapse, Fin Times 2 (Nov 8, 2007) (reporting that banks and insurance companies did not embrace the protection fund);
48. Paul Betts, Will Deutschland AG Battle with the Giant Locusts, Fin Times 14 (Nov 8, 2007) (reporting that some German politicians are nostalgic for the old "Deutschland AG system of corporate control" that protected Germany's corporate jewels and are searching for new ways to restrict foreign investment).
49. See also Monk, Recasting the Sovereign Wealth Fund Debate at 26-28 (cited in note 10) (suggesting that reform could come through "the implementation of a qualified foreign institutional investors (QFII) program for the 40 or so SWFs seeking to invest [in the United States]").
50. Department of the Treasury, Statement of G-7 Finance Ministers and Central Bank Governors (Oct 19, 2007), online at http://www.treas.gov/press/ releases/hp625.htm (visited Jan 11, 2009) (calling on the IMF and World Bank to adopt policies regarding SWF "non-discrimination, transparency, and predictability").
51. See also Lesley Wroughton, IMF Endorses Wealth Fund Guide Plan, (Reuters Mar 22, 2008), online at http://uk.reuters.com/article/ousiv/ idUKN2149803220080322 (visited Jan 11, 2009) (discussing the "best practices" the IMF planned to encourage SWFs to adopt).
52. Department of the Treasury, Statement of G-7 Finance Ministers and Central Bank Governors (cited in note 38).
53. Communiqué of the International Monetary and Financial Committee of the Board of Governors of the IMF 16 (IMF Oct 20, 2007), online at http://www.imf org/external/np/cm/2007/ 102007a.htm (visited Jan 11, 2009) (announcing the International Monetary and Financial Committee's support for continued dialogue between SWFs and recipient countries to avert protectionism and instability).
54. IMF, IMF Convenes First Annual Roundtable of Sovereign Asset and Reserve Managers (Nov 16, 2007), online at http://www.imf.org/external/np/ sec/pr/2007/pr07267.htm (visited Jan 11, 2009).
55. IMF, International Working Group of Sovereign Wealth Funds Is Established to Facilitate Work on Voluntary Principles (May 1, 2008), online at http://www.imf.org/external/np/sec/pr/2008/ pr0897.htm (visited Jan 11, 2009). The IWG's members are: Australia, Azerbaijan, Bahrain, Botswana, Canada, Chile, China, Equatorial Guinea, Iran, Ireland, Kuwait, Libya, Mexico, New Zealand, Norway, Qatar, Russia, Singapore, South Korea, Timor-Leste, Trinidad and Tobago, the UAE, the United States, and Vietnam; Saudi Arabia, the OECD, and the World Bank participate as observers. Id. The Director of the IMF's Monetary and Capital Markets Department and a senior representative of ADIA were selected as co-chairs of the group by the participating SWFs. See id.
56. IWG, International Working Group of Sovereign Wealth Funds Reaches a Preliminary Agreement on Draft Set Generally Accepted Principles and Practices- "Santiago Principles" (Sept 2,2008), online at http://www.iwg-swf.org/pr/swfpr0804.htm (visited Jan 11, 2009).
57. IWG, Sovereign Wealth Funds: Generally Accepted Principles and Practices-"Santiago Principles" 7-9 (Oct 2008), online at http://www.iwg-swf.org/pubs/eng/santiagoprinciples.pdf (visited Jan 11, 2009).
58. OECD/City of London Conference, Sovereign Wealth Funds in the Global Investment Landscape: Building Trust (Mar 31, 2008), online at http://www.oecd.org/document/38/03343,en2649-201185-40098406-l-l-l-l,00.html (visited Jan 11, 2009).
59. OECD Investment Committee, Sovereign Wealth Funds and Recipient Country Policies 6 (OECD Apr 4, 2008), online at http//www.oecd.org/ dataoecd/34/9/40408735.pdf (visited Jan 11, 2009).
60. See also Meeting of the Council at Ministerial Level, OECD Declaration on Sovereign Wealth Funds and Recipient Country Policies (OECD June 5, 2008), online at http://vww.olis.oecd.org/ olisA2008doc.nsf/LinkTo/NT000032DE/ $FILE/JT03247225.pdf (visited Jan 11, 2009);
61. Carolyn Ervin, Sovereign Wealth Funds, 267 OECD Observer 21, 22 (May/June 2008).
62. Commission of the European Communities, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Common European Approach to Sovereign Wealth Funds 4-5 (Feb 27, 2008), online at http://ec.eurcpa.eu/ commission-barroso/president/pdf/COM2008-115-en.pdf (visited Jan 11, 2009).
63. Id at 5-6, 8-9.
64. Department of the Treasury, Treasury Reaches Agreement on Principles for Sovereign Wealth Fund Investment with Singapore and Abu Dhabi (Mar 20, 2008), online at http://www. ustreas.gov/press/releases/hp881.htm (visited Jan 11, 2009).
65. Id. For additional background, see generally Bryn Morgan, ed, Economic Indicators, July 2008: Sovereign Wealth Funds iii-xvi (House of Commons Library Research Paper 08/59, July 2008), online at http://www.parliament.uk/ commons/lib/research/rp2008/rp08-059.pdf (visited Jan 11, 2009).
66. See text accompanying note 14.
67. As Gilson and Milhaupt have observed, "equity investments must be sold to a willing buyer in light of any change in circumstances, including the actions of the particular sovereign; SWFs, and their governments, bear the cost of any decline in equity value." Gilson and Milhaupt, 60 Stan L Rev at 1360 (cited in note 4).
68. Norway's fund has a "Council of Ethics" that recommends divestiture if a particular investment creates a risk of the fund's complicity in, for example, human rights violations, serious environmental damage, or "other particularly serious violations of fundamental ethical norms"; its activities have led the fund to exclude Kerr-McGee, Wal-Mart Stores, Inc, and FreeportMcMoRan Copper & Gold Inc from the fund's investment universe, among several other companies.
69. See Simon Chesterman, The Turn to Ethics: Disinvestment from Multinational Corporations for Human Rights Violations- The Case of Norway's Sovereign Wealth Fund, 23 Am U Intl L Rev 577.588-93 (2008).
70. See generally Roberta Romano, Public Pension Fund Activism in Corporate Governance Reconsidered, 93 Colum L Rev 795 (May 1993) (examining the role of activist public funds).
71. See Editorial, California's Stern Rebuke, Wall St J A16 (Apr 21, 2008), and the response, Stephen Lerner, SEIU Seeks Ethics, Good Returns, Wall St J A8 (Apr 26, 2008) (defending SEIU's efforts as "in the footsteps" of the fight against South African apartheid).
72. Benn Steil, California's Sovereign Wealth Fund, Wall St J A14 (Mar 7, 2008) (criticizing CaIPERS for taking the same kind of politicized and fiscally irresponsible actions an SWF could take).
73. Id (detailing the expected losses from politically motivated divestments and exclusionary rules). These observations appear accurate. See Romano, 93 Colum L Rev at 798 (cited in note 54) (finding "an inverse relation between the return on funds' investments and the degree of political involvement in their organizational form, and between return on investments and policies favoring social investing").
74. That share-value maximization should be the sole motive for corporate action is not a principle that is accepted by all, even in the United States. See, for example, Kent Greenfield, The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities 41-71 (Chicago 2006) (arguing that corporations should be considered to have duties to their employees as a central tenant of corporate law).
75. Federal law provides: [A] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case ... in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. 28 USC §1605(a).
76. See also Victor Fleischer, A Theory of Taxing Sovereign Wealth, 84 NYU L Rev (forthcoming 2009) (explaining that sovereign portfolio investing is exempt from taxation under current law as a matter of domestic statutory law, not sovereign immunity).
77. Department of the Treasury, Treasury Reaches Agreement (cited in note 49) (listing a set of joint policy principles, including the idea that "recipient countries should not discriminate among investors" and that "[i]nward investment policies should treat like-situated investors equaUy").
78. See Remarks by Acting Under Secretary for International Affairs Clay Lowery (cited in note 19) ("Sovereign Wealth Funds are, in principle, long-term investors that can be expected to stick with a strategic asset allocation despite short-term losses. They are not highly leveraged.");
79. Hammer, Kunzel, and Petrova, Sovereign Wealth Funds at 16 (cited in note 23) ("Most SWF respondents note that they are not allowed to borrow or use leverage.").
80. In fact, Koch states: "As a privately held company, Koch Industries does not release its financial statements or other financial data...Koch does provide information to Moody's Investors Service and Standard and Poor's, who rate Koch Industries, LLC's long-term credit."
81. Georgia Pacific Corp, Schedule 14D-9C Exhibit 99.3 2 (Nov 14, 2005), online at http://www.secinfo.com/ d14D5a.z6sW9.b.htm#lstPage (visited Jan 11, 2009). The statement goes on to report overall gains for Koch that dwarf those of S&P companies See id. No one can look to the data to either interpret or verify the claims. But this hardly matters. The authors would both prefer having stock in Koch Industries to receiving information about it.
82. See Part I.B.
83. See Rose, 87 NC L Rev at 120 (cited in note 9) (observing that SWFs "operate under unique scrutiny" and that the suspicion surrounding them "will likely cause [them] to act hypercautiously").
84. Temasek to Avoid Politically Sensitive Investments (Reuters Nov 23, 2007), online at http:// in.reuters.com/article/idINSIN215220O71125 (visited Jan 11, 2009).
85. Citi to Sell $7.5 Billion Equity Units to Abu Dhabi Group (Reuters Nov 26, 2007), online at http://www.reuters.com/article/ idUSWEN270620071127 (visited Jan 11, 2009).
86. See Jonathan Weisman and Bradley Graham, Dubai Firm to Sell U.S. Port Operations: Move to End Three-week Dispute Comes after GOP Lawmakers, Defying Bush, Vowed to Kill Deal, Wash Post Al (Mar 10, 2006) (reporting that DPW was forced to sell when the president's veto threat proved ineffective and Congress was set to revoke the sale).
87. For further elaboration, see Steil, California's Sovereign Wealth Fund. Wall St J at A14 (cited in note 56).
88. Of course, if specific weaknesses in the CFIUS review process were identified and determined by national security experts to present credible threats to the United States, further reforms would be warranted. But, for the reasons discussed below, we do not believe that generalized concerns about the implications of SWF investment on national security justify the broad regulatory responses currently under discussion.
89. Baron de Montesquieu, 1 The Spirit of the Laws 316 (Hafner 1949) (Thomas Nugent, trans).
90. See Solomon W. Polachek and Carlos Seiglie, Trade, Peace and Democracy: An Analysis of Dyadic Dispute *62 (Institute for the Study of Labor Discussion Paper No 2170, June 2006), online at http://papers.ssrn.com/ abstract-915360 (visited Jan 11, 2009) (surveying conflict-trade literature).
91. Compare Stergios Skaperdas and Constantinos Syropoulos, Guns, Butter, and Openness: On the Relationship between Security and Trade, 91 Am Econ Rev 353, 357 (May 2001) ("Trade and economic interdependence can help resolve conflict, but it is naive and scientifically inappropriate to think they are sufficient by themselves to do so.");
92. Kenneth N. Waltz, Theory of International Politics 158 (McGraw-Hill 1979) (arguing that the close interdependence of European nations before World War I refutes the idea that trade leads to peace).
93. Polachek and Seiglie, Trade, Peace and Democracy at 52-55 (cited in note 71) (discussing studies examining FDI's impact on international relations, including one suggesting that "the United States, China, and Taiwan are drawn closer together because FDI flows between the countries instigate the necessity to maintain stability").
94. Donald J. Boudreaux, Want World Peace? Support Free Trade. Christian Sei Monitor 9 (Nov 20, 2006).
95. See Gregory Meyer, Chavez Threat, Cold Snap Lift Crude 2% to $93.59, Wall St J C5 (Feb 12, 2008) (reporting that Chavez's threat was discredited by analysts, although it still managed to "spook the market").
96. CB Richard Ellis, Sovereign Wealth Funds Expected to Invest $725 Billion in Commercial Real Estate Globally by 2015 (Sept 24, 2008), online at http://www.cbre.com/NR/rdonlyres/ED6B8 EB8-DE38-4C9B-9C50- 8776257094B2/0/PressReleaseSoverignWealthFundsfinal.pdf (visited Jan 11, 2009).
97. For a study on the effectiveness of freezing sovereign assets as an economic sanction, see Mahvash Alerassool, Freezing Assets: The USA and the Most Effective Economic Sanction 1-7 (St Martin's 1993). See also Rose, 87 NC L Rev at 111 (cited in note 9) (observing that a "large investment by CIC in a major media company ... would perhaps incentivize China to protect intellectual property rights more effectively").
98. See Samuel Gregg, Sovereign Wealth Follies, Acton Commentary (Acton Institute Feb 6, 2008), online at http://www.acton.org/commentary/429- sovereign-wealth-follies.php (visited Jan 11, 2009) (observing that increased SWF investments suggests "that many developing nations are turning away from squandering their wealth on vain monuments, petty wars, and highways that lead nowhere").
99. See Sovereign Wealth Fund Acquisitions and Other Foreign Government Investments in the U.S.: Assessing the Economic and National Security Implications, Hearing before the Senate Committee on Banking, Housing, and Urban Affairs, 110th Cong, 1st Sess (Nov 14, 2007) (testimony of Gerald Lyons), online at http://banking.senate.gov/pubhc/-files/111407-Lyons.pdf (visited Jan 11, 2009) (noting that "if Asian central banks were to switch reserves to match countries with whom they trade, they would need to offload $1.39 trillion, or a quarter of the world's reserves").
100. Cox, The Rise of Sovereign Business (cited in note 2).
101. Summers, Funds that Shake Capitalist Logic, Fin Times at 11 (cited in note 1).