Weber: Debate on sovereign wealth funds becoming more objective

09 Juli 2008 - “For a long time the debate on sovereign wealth funds focussed on their hypothetical risks. Now the discussion has become more objective and a more balanced view is prevailing,” said Manfred Weber, Chief Executive of the Association of German Banks, against the backdrop of the resolution on sovereign wealth funds adopted today by the European Parliament.

“The European Parliament quite rightly underlines the long-term orientation of sovereign wealth funds and their positive contribution to stabilising the financial markets,” Weber continued. He said sovereign wealth funds played a key role in investing the world’s rapidly growing foreign currency reserves more effectively in the international financial markets. The Parliament’s clear call for the European Union to remain committed to the freedom of investment and the free movement of capital was therefore a logical and welcome step.

Weber stressed that it was important for the resolution’s request for the European Commission to analyse possible defence mechanisms against sovereign wealth funds to be closely geared to this commitment. The European Union already had a number of tools at its disposal, such as competition law and common capital market rules, to ward off undesirable practices.

“But for an objective view of the topic, it must also be realised that Europe and European companies can benefit from foreign direct investment even if reciprocity is not always granted everywhere,” he said. He recommended a constructive approach to the resolution’s reference to the principle of reciprocity: “We should use the positive effects of free market access in Europe as a means of encouraging other countries to open up their markets too.”