We won't play politics, sovereign funds promise

8 April 2008

The US Treasury has received assurances from Singapore and the UAE that sovereign wealth funds will not be used for political gain.

Officials also expressed the hope yesterday that there would soon be increased regulation of the funds, with risk controls and disclosure requirements imposed.

In recent months, Abu Dhabi and Singapore have bought heavily in banks such as Citigroup and Merrill Lynch - leading to fears that the foreign governments would abuse their holdings by making political demands on the firms.

Commenting, Treasury Secretary Henry Paulson said: "The US welcomes sovereign wealth fund investment and looks forward to continuing to work with these two countries and others…to develop best practices for sovereign wealth funds and recipient countries."

Elsewhere, managing director of Bain and Company Steve Ellis said yesterday that he estimated the sovereign funds to be worth between $10 and $12 trillion by 2015.

Around $3 trillion is currently held in the funds worldwide, Gulf News reports.

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