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Promoting responsible sovereign lending and borrowing: the role of sovereign wealth funds

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  • Pavlidis, Georgios

Abstract

Purpose This paper aims to investigate the idea of building responsible borrowing and lending into sovereign wealth fund (SWF) decision-making. SWFs, which currently manage US$8 trillion in assets, are influential institutional investors, but their role in sovereign debt markets needs to be further explored. In this context, this paper aims to critically assess the linkages and convergences between the Santiago Principles on SWF and the United Nations Conference on Trade and Development (UNCTAD) principles on responsible sovereign lending and borrowing. Design/methodology/approach This paper draws on legal scholarship, reports, policy papers and other open-source data to explore the role of SWFs in sovereign lending, borrowing and debt restructuring. Findings Building responsible borrowing and lending into SWF decision-making is feasible and justified on the grounds of both ethics and public duty. It is also justified in financial terms because it would protect SWFs from irresponsible lending and borrowing practices at the micro level while contributing to global financial stability at the macro level. Originality/value This is the first comprehensive study to juxtapose two important normative processes, the Santiago Principles and the UNCTAD Principles.

Suggested Citation

  • Pavlidis, Georgios, 2019. "Promoting responsible sovereign lending and borrowing: the role of sovereign wealth funds," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 27(4), pages 443-452.
    • Handle: RePEc:zbw:espost:318020
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    References listed on IDEAS

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    1. Chen Meng, 2015. "Sovereign wealth fund investments and policy implications: a survey," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 23(3), pages 210-229, July.
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    3. Jeanne Amar & Christelle Lecourt & Valerie Kinon, 2018. "Is the emergence of new sovereign wealth funds a fashion phenomenon?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(4), pages 835-873, November.
    4. Ann Pettifor, 2006. "The Coming First World Debt Crisis," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-23675-2, August.
    5. Inaki Aldasoro & Torsten Ehlers, 2018. "Global liquidity: changing instrument and currency patterns," BIS Quarterly Review, Bank for International Settlements, September.
    6. Charlie Cai & Iain Clacher, 2009. "Chinese investment goes global: the China Investment Corporation," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 17(1), pages 9-15, February.
    7. Chen Meng, 2015. "Sovereign wealth fund investments and policy implications: a survey," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 23(3), pages 210-229, July.
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