Rich nations must not demonize us, say state funds

They should have just said, "Hey, don't like it, we'll pull every damn dime out by lunch, and see how much demagoguing you do then."


By Natsuko Waki and Clara Ferreira-Marques 53 minutes ago

DAVOS, Switzerland (Reuters) - The United States and other countries must not demonize sovereign wealth funds as they come to the aid of troubled U.S. banks, some of the world's biggest state-run investors said on Thursday.

A senior Bush administration official denied the United States feared such government-controlled investment funds, many of which are based in Asia, the Gulf and Russia, but said their rapid growth demanded vigilance.

Sovereign fund managers at the World Economic Forum in Davos accused rich nations of labeling them as a potential threat, when there was no evidence that they are destabilizing the global economy.

"It's like the sovereign wealth funds are guilty until proven innocent," said Mohamed Al-Jasser, vice governor of Saudi Arabian Monetary Agency. "Are we creating a straw man before we destroy it? We have to be careful about that," he told a panel discussion packed with business and political leaders.

The Davos gathering has been dominated by talk of the failings of the U.S. financial system, and whether state-run investment funds pumping billions of dollars into troubled banks are essential to calming global markets.

http://news.yahoo.com/s/nm/20080124/bs_nm/davos_dc_7