UPDATE 1-US Treasury to meet with Abu Dhabi,Singapore funds
Thu Mar 20, 2008 12:55pm EDT
reuters.com
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WASHINGTON, March 20 (Reuters) - U.S. Treasury Secretary Henry Paulson plans to meet on Thursday with government officials from Abu Dhabi and Singapore to discuss issues surrounding sovereign wealth funds, the Treasury said.
Paulson and Deputy Treasury Secretary Robert Kimmitt will meet with officials including Abu Dhabi Executive Council Member Hamad Al Hurr Al Suwaidi and Singapore Finance Minister Tharman Shanmugaratnam and executives from their sovereign funds.
They are expected to discuss efforts to develop best practices for sovereign wealth funds and inward investment regimes for countries that are the recipients of sovereign wealth fund investments.
The role of sovereign wealth funds in helping the ailing U.S. banking sector deal with the credit crisis may be among topics discussed at the meeting. Abu Dhabi last year bought a $7.5 billion stake in Citigroup (C.N: Quote, Profile, Research), while Singapore's Temasek Holdings bought a $4.4 billion stake in Merrill Lynch (MER.N: Quote, Profile, Research) .
The Treasury has been pressing for the International Monetary Fund and World Bank to develop a "best practices" guide for sovereign wealth funds that have become increasingly active in buying U.S. assets with growing foreign exchange reserves from oil and international trade.
The Treasury wants the guide to help soothe concerns about their actions, specifying that all investments must be made for commercial, not political, purposes, and that they adopt standards for transparency in their dealings.
The IMF board is meeting on Friday to discuss the IMF's work in compiling voluntary best practice guidelines for wealth funds.
The meeting is expected to consider a preliminary paper of the IMF's work since November on preparing the guidelines. A draft of the best practice guidelines is expected by the IMF's annual meetings in October.
Sovereign wealth funds now have assets of some $1.9 trillion to $2.9 trillion and this could grow to $15 trillion in the next eight years, the Treasury has estimated.
The Wall Street Journal reported on Tuesday that Abu Dhabi has pledged not to use its investments to further its political aims and has notified the Treasury Department of a set of principles that will guide its fund activities.
Following the meeting, Treasury Assistant Secretary for International Affairs Clay Lowery will brief journalists at 4:15 p.m (2015 GMT). (Reporting by David Lawder; Additional reporting by Lesley Wroughton, Editing by Andrea Ricci)
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