Asian Sovereign Wealth Funds In The Age Of Global Rebalancing

If we consider the role of SWFs in the global economy, it can be argued that to a large extent, sovereign wealth funds (SWFs) were born of global imbalance. Indeed, the latter imbalance has caused large foreign exchange inflows into surplus countries, which have been compounded by their exchange rates being pegged or managed against the falling dollar. This has contributed to the build-up of reserves and SWFs, while at the same time causing a global savings glut and a fall in real long-term interest rates. However, the fact that SWFs are looking for higher returns and asset diversification implies

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