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The so-called "sovereign wealth funds": regulatory issues, financial stability and prudential supervision

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  • Simone Mezzacapo

Abstract

This paper studies the regulatory issues related to the "Sovereign Wealth Funds" (SWFs), described as "special purpose" government investment vehicles. Concerns have been expressed due to SWFs limited disclosure and transparency and their multiple investment objectives. While the risk of a political/strategic bias should not be underestimated, this paper argues that at present a specific regulation of SWFs may not be needed, as their asset management is already constrained by many regulatory, economic and political factors. With specific reference to legal aspects, this paper proposes that a balanced and proportionate regulatory approach to SWFs issues may just require, for the time being, to complement "soft law†instruments with a "light†and "indirect†regulatory and supervisory framework for SWFs equity investments.

Suggested Citation

  • Simone Mezzacapo, 2009. "The so-called "sovereign wealth funds": regulatory issues, financial stability and prudential supervision," European Economy - Economic Papers 2008 - 2015 378, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0378
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    Citations

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    Cited by:

    1. Yu-Wei Hu, 2010. "Management of China's foreign exchange reserves: a case study on the state administration of foreign," European Economy - Economic Papers 2008 - 2015 421, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Park, Raphael Jonghyeon & Xu, Simon & In, Francis & Ji, Philip Inyeob, 2019. "The long-term impact of sovereign wealth fund investments," Journal of Financial Markets, Elsevier, vol. 45(C), pages 115-138.
    3. Massimiliano Castelli & Fabio Scacciavillani, 2015. "SWFs and State investments: A preliminary general overview," Chapters, in: Research Handbook on Sovereign Wealth Funds and International Investment Law, chapter 1, pages 9-38, Edward Elgar Publishing.
    4. Bengtsson, E., 2013. "Fund Management and Systemic Risk - Lessons from the Global Financial Crisis," CITYPERC Working Paper Series 2013-06, Department of International Politics, City University London.
    5. Alhashel, Bader, 2015. "Sovereign Wealth Funds: A literature review," Journal of Economics and Business, Elsevier, vol. 78(C), pages 1-13.
    6. Gangi, Francesco & Mustilli, Mario & Varrone, Nicola & Graziano, Domenico, 2023. "Target firms’ characteristics and the effects of sovereign wealth funds’ investments: Does cultural context of SWFs matter?," Research in International Business and Finance, Elsevier, vol. 65(C).
    7. Bernadeta Baran, 2012. "Znaczenie państwowych funduszy majątkowych na globalnym rynku kapitałowym," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 9, pages 39-59.

    More about this item

    Keywords

    Sovereign Wealth Funds; Official Reserves; International Imbalances; Free Movement of Capital; Financial Regulation; Competition Policy; Soft Law; Voting Rights; Market Economy Private Investor Test; The so-called sovereign wealth funds regulatory issues financial stability and prudential supervision; Mezzacapo;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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